Cement production in Africa suffers from a myriad ofproblems.

These include high energy costs, cheap

importsand over capacity but it still attracts new entrants each yeargiven the fact that the continent is
ripe with majorinfrastructure projects in the pipeline and demand continuesto rise year on year.
However, high production costs and lowpriced imports plagues the development of the local
cementproduction industry. Add to this a growing over capacity. In2020 the market faced the additional
challenges paused bythe Covid pandemic.East AfricaIn Tanzania the country faced its worst crisis in
recent yearswhen all four cement producers closed down ostensibly formaintenance purposes in the
latter part of 2020. Thisresulted in diminished supplies to the construction industrywhich saw the price
of cement rise significantly promptingthe government try to intervene and clamp down on dealerswho
were hoarding the commodity. Surprisingly this camedespite the county having an overcapacity as
demand standsat about 5.5million tons against a production capacity ofabout 10 million tons. Cut throat
pricing and cheap importshas meant razer thin profit marginsTanzania cement production capacity
standsat 10 million tons per annumThe four main cement manufacturers are Twiga Cementbased in Dar
es Salaam, Tanga Cement in Tanga, MbeyaCement in Mbeya and Dangote Cement located in Mtwara
inSouthern region.In Kenya the price of cement has remained relatively steadyin 2020 with cement price
per 50kg bag standing at aroundKsh650 when compared to the turmoil witnessed inTanzania and
Nigeria. The cooling off of investor interest isevident with no new plants having come up recently.
InWest Pokot region Cemtech, a subsidiary of India’s SanghiGroup has sold off its interests in the
limestone rich area toa local firm after failing to move forward in establishing anew cement plant in the
area that had been slated at a costof over US$100 million.Kenya cement production capacity stands at13
million tons per annumThe market in Kenya is gearing for sustained growth owingto infrastructure
projects that have taken off and thepandemic has had little impact in the market for the longterm.
Current demand is estimated at 6 million tons perannum against a production capacity of 13million
tons.West AfricaIn Nigeria the year closed with a spike in the price ofcement from NGN2600/50kg to
NGN3500/50kg with pricesreaching even NGN4500 in outlying areas. Players in theindustry stated that
the rise was due to the transportlogistics owing to an increase in fuel costs along withheightened
demand in an environment of reducedproduction as plants carry shutdown for maintenance. Amove
also seen in Tanzania that seems to be a trend asproducers opt for reduced production in order to
shore-upprices.The key players in Nigeria are Dangote (29Mtpa), Lafarge(10.5 tpa) and BUA who have a
combined capacity of about45 million tons per annum against a demand of about 25million tpa.Nigeria
cement production capacity standsat 45 million tons per annumDespite this over-capacity the price of
cement remains highin the country compared to its neighbors.South AfricaOverall the South African
market is awakening from thepandemic at the end of the year with infrastructure andhousing projects
kicking in. However a dark clouds looms onthe horizon with the expiry of tariff restrictions on
cheapcement imports from the East which is seem as the greatestrisk to the industry. The feeling
amongst industry players isthat the cheap imports will have a negative impact on thesustainability of the
local industry if they are not extended.Cheap blended alternatives also pose a threat to the
higherquality standards of local products.South Africa cement production capacity stands at 20
milliontons per annumImportsAcross Africa dumping of cheap cement from far eastmarkets continues
to plague the local industry distortingpricing and depressing demand for locally produced cement.The
lack of protection of local markets threatens its viabilitywhich sluggish demand in 2020 due to the
pandemic hasonly exacerbated matters.Infrastructure and housing projects willoffer a glimmer of hope
for cementproduction.Cement production in Africa will likely face consolidation asthe impact of
increased production and competition forcessmaller players to shut down. The entry of Chinese in
thisscenario as they buy in could cause further woes for thelocal industry. ARM in Tanzania has already
been bought bya Chinese firm. Newer firms that are more efficient andenvironmentally friendly will be
the winners in the race.