East Africa Cement Market to Experience Growth with Several Infrastructure Development Projects

Cement is a high-quality, economical construction material that is widely used across the world. It is a fine powder made by heating the ground mixture of clay and limestone at a high temperature. It is mixed with water and used as a binding material in the construction industry. Depending on the capability of cement to set under the presence of water, it can be categorized into hydraulic and non-hydraulic cement. Non-hydraulic cement reacts with the carbon dioxide present in the environment to set on the surface and offers optimal resistance against chemicals. On the other hand, hydraulic cement hardens quickly due to the chemical reaction between water and dry ingredients.

The history of cement in East Africa can be traced back to the establishment of the East African Portland Cement Company (EAPCC) which commenced its operations as a trading company. It used to import cement from England for construction activities in British East Africa, now known as Kenya. In the early 1930s, it was consolidated with the first East African cement factory in Nairobi's Industrial Area with a production capacity of around 60,000 Tons. Later, many other manufacturers established their mills across the region, which provided a thrust to the growth of the cement market. According to IMARC Group, the East Africa cement market size reached a volume of 15.5 Million Tons in 2018.

East Africa Cement Market Trends:

Over the last few years, several large-scale infrastructural projects have been launched across various countries in compliance with long-term development plans of their respective governments. For example, the ‘Vision Djibouti 2035’ plan aims to transform Djibouti into a logistics and commercial hub by expanding existing ports and developing new deep-water harbors. Moreover, to improve the residential sector, the regulatory authorities have started introducing major housing projects in the region. For instance, the Government of Kenya plans to provide minimum 500,000 affordable homes in all major cities by 2022, which will, in turn, create approximately 350,000 jobs. Other than this, rising traffic safety concerns, and the development of roads and urban infrastructure have actively aided the cement market growth in East Africa. In Uganda, for example, the upcoming construction of Bukasa port, development of Entebbe International Airport, and redesigning of Malaba-Kampala railway route into a standard gauge line are supporting the cement industry. On account of these factors, the market is expected to reach a volume of 23.4 Million Tons by 2024, registering a CAGR of 7.3% during 2019-2024.

Portland Cement – Leading Product Type

Currently, Portland cement represents the most popular type of cement used in the region, followed by blended cement. Portland cement is a fine powder which is produced by heating clay and limestone in a kiln. It is further bifurcated into ordinary Portland cement (OPC) and white Portland cement. Ordinary Portland cement is further categorized into five variants according to their fineness, general characteristics and ability to resist sulfate attacks. In comparison with white Portland cement, the production of ordinary Portland cement is more affordable and straightforward. Owing to this and the easy availability of raw materials, Portland cement is mostly preferred by the builders in East Africa for preparing concrete, stucco, mortar and grout.

Residential Sector Represents the Largest Application Area

Cement is majorly used in the residential sector, followed by the commercial and infrastructure sectors. In East Africa, there has been a substantial increase in the number of investments made in housing projects on account of increasing investor interest. Residential projects have prompted the builders in the region to introduce new services, products and state of the art technology, thereby contributing to the market growth.

Ethiopia Dominates the Cement Market

Ethiopia represents the largest market for cement in East Africa, accounting for a volume of nearly 10.16 Million Tons in 2018. Other major regions include Kenya, Tanzania, Uganda, Rwanda and Burundi. The growth in Ethiopia can be attributed to the growing number of cement factories, owing to which the country has started exporting cement. Apart from this, increasing foreign investments, rising infrastructure development and booming construction projects, such as Grand Ethiopian Renaissance Dam, are also contributing to the growth of the market.

Imarc Group is a leading market research and consulting company that offers management strategy and market research worldwide.