Africa’s primed for cement production growth

Nigeria and South Africa remain the leading sub-Saharan cement producers, with 25% and 16% of total market share, with Ethiopia and Kenya accounting for 11% and 6% respectively of the market, reports the Ethiopian Radio and Television Agency. Cement consumption per capita in East Africa is significantly below the global average of 500kg, with the region's largest markets in Kenya (80kg) and Ethiopia (61kg) - both said by ERTA to be indicating significant potential for growth. This reflects high domestic
Quarry Products / October 10, 2014

Nigeria and South Africa remain the leading sub-Saharan cement producers, with 25% and 16% of total market share, with Ethiopia and Kenya accounting for 11% and 6% respectively of the market, reports the Ethiopian Radio and Television Agency.

Cement consumption per capita in East Africa is significantly below the global average of 500kg, with the region's largest markets in Kenya (80kg) and Ethiopia (61kg) - both said by ERTA to be indicating significant potential for growth. This reflects high domestic prices, which have constrained demand.

At 12.6 million/tonnes per year, Ethiopia is the leading East African country for cement output. It has overtaken Kenya, which historically dominated regional output, producing the equivalent of 7.4 million tonnes/year in 2012-13.

At the same time, both Kenya and Uganda are regional export hubs, having exported a total of 1.4 million tonnes in 2012.

The output among East African countries is said by ERTA to be significant relative to other African regions, particularly when considering that Central Africa historically been a marginal producer, with a capacity of a mere 1.6 million tonnes per year.

However, this has been changing with the emergence of Angola as a major producer. Angola has rapidly built up its capacity to around 8 million tonnes/year, all of which it consumes.

By comparison, in sub-Saharan Africa, Nigeria remains the largest consumer, with an estimated 18.3 million tonnes consumed in 2013, followed by South Africa, with 12.2 million tonnes. Together these two countries represent half of sub-Saharan Africa's cement consumption.

Angola, Ethiopia and Ghana combined consume between 5-6.5 million tonnes, while Kenya (3.7 million tonnes) and Tanzania (3 million tonnes) are East Africa's leading cement consumers.

ERTA report that rapid expansion of production capacity across Sub-Saharan Africa has led to a sharp drop in cement imports, reversing the deficit that has built up over the past decade.

Nigeria, which as recently as 2010 was importing $500 million worth of cement each year, has seen imports slump to US$139 million in 2012, while Ethiopia's imports have fallen by 75%, to just $43 million over the same period.

This reflects the steady tightening of both countries' import regimes, where the governments are phasing out licences to import cement and encouraging investment in local production.

As a result of these policies, ERTA reports, both Nigeria and Ethiopia are on track to become net exporters of cement in the near future.