Nigeria’s Dangote Cement shakes-up Kenya market

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Africa’s richest man, Aliko Dangote, cement plant in Ethiopia has started selling the cement in Kenya with plans of setting up a local manufacturing plant reports Daily Nation.

The low cost Dangote Cement from Ethiopia is expected to further drive down retail prices of cement in the Kenyan market after remaining static for nearly 10 years.

The cement is retailing at around 74 US dollars per tonne, making it at least 40 percent cheaper than locally manufactured brands. This price includes the transport charges to Kenya and all taxes applicable while the company still makes a profit.

Importing cement into Kenya is a short term market strategy for the company as it prepares to set up a local plant in 2019. The factory’s annual production capacity is expected to be at three million tonnes from the previous 1.5 million.

Dangote has a factory in Tanzania which was started producing this year. Cement prices in Tanzania fell by a third in the half year after Dangote started selling the cement in the East African country this year. The firm cement price in Tanzania is at 80 US dollars undercutting competitors by more than 20 percent.

“We estimate that in June we achieved 23 per cent market share across Tanzania and were the leading supplier of cement in the key market of Dar es Salaam,” Dangote said

Dangote cement plans to topple LafargeHolcim as the largest producer of cement in Africa. Dangote works on economies of scale to set lower prices and grow its market share. Dangote plant in Ethiopia produces 2.5 million tonnes per year.

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