Local cement manufacturers have begun exploring alternative market opportunities to guarantee their survival in a globalized and increasingly competitive market.
According to Savannah Cement Managing Director, the local cement manufacturers will need to up their game by providing a diversified range of value added products.
Such diversification will include raising the volume of ready mix concrete deliveries for small to large construction projects to complement the existing bagged cement sales.
Speaking at the ongoing Totally Concrete East Africa Conference and Expo, at the Laico Regency Nairobi, Ndegwa confirmed that cement manufacturers are evaluating various market possibilities in the face of increased local and international competition.
At Savannah Cement, efforts he said are already underway to encourage a consumer shift to bulk cement deliveries and adoption of premix concrete supplied onsite beyond the current 50kg cement bag purchases.
“We are alive to the market dynamics and I can assure you that at Savannah Cement, we are not resting on our laurels as we continue to explore the possibility of diversifying our product range,” Ndegwa said.
Savannah Cement, he said has already moved to formulate a Hydraulic Road Bidder (HRB) product, which is a specialist cement type, used in road construction and related works.
Long-term, the firm he said would also explore the possibility of setting up a value added products factory for precast cement products including building slabs, concrete bridges, wall panels and related structures.
“We can’t ignore the numerous market threats and advances, neither can we afford to cry foul. We all need to play our part by beefing up customer experience standards, embracing market innovations and seeking to diversify our product range beyond the ordinary Portland cement (OPC) staple,” Ndegwa said.
According to the Kenya National Bureau of Statistics (KNBS) Leading Economic Indicators Report for the month of July 2016, the quantity of cement produced decreased from 546,899 Metric Tonnes in May 2016 to 536,471 Metric Tonnes in June 2016. Consumption of cement dropped from 512,471 Metric Tonnes in May 2016 to 494,300 Metric Tonnes in June 2016.
The decline has been attributed to a slower uptake by real estate developers who rely on bank finance for their projects. “At Savannah Cement, we have noted a growth in the domestic segment that caters for individual home builders. The slowdown by real estate developers, we understand is due to ongoing facility re-negotiations arising from the recent interest rate adjustments and we expect to enjoy growth from this month as such financing deals are regularized,” Ndegwa said.
In Kenya, Savannah Cement enjoys pride of place as the most modern cement manufacturing and sales company, currently running an eco friendly and energy efficient plant near Kitengela town.
Strategically, Savannah Cement aspires to be the cement manufacturer company of choice in the region and is actively engaged in Rwanda, Burundi, Tanzania, Uganda, Democratic Republic of Congo and South Sudan.