Date: 25/08/2008
Source: Kenyan Government
Title: Kenya: Kibaki: Ground breaking ceremony of the national cement company

Ladies and Gentlemen,

It is a great pleasure for me to perform the ground breaking ceremony for the development of this new cement factory here in Athi River. Cement is an important ingredient in the building and construction industry.

The construction of this factory is therefore timely because of the rapid growth in demand for the commodity that we have witnessed over the last 6 years. For instance, in 2003 cement consumption in Kenya was estimated at about 1.2 million metric tonnes.

The level of consumption has almost doubled to over 2 million metric tonnes in 2007. Given the rapid increase in the demand for cement, my government is encouraging private investors to build more cement factories in order to serve our needs and for export to our neighbouring countries.

I therefore take this opportunity to congratulate Devki Steel Mills Limited group of companies for seizing the opportunity to invest 50 million dollars in the development of this project. This huge investment is a clear statement of your confidence in the future of this country. As I have already said, your investment is timely, and I have no doubt that you will benefit from the thriving construction industry and enhance your participation as well as contribution to Kenya’s economic development.

Ladies and Gentlemen,

Kenya’s manufacturing sector is mainly agro-based, with a strong linkage to the agricultural sector. Over the last five years, the sector's contribution to the Gross Domestic Product has been estimated at about 10 percent. The sector's Gross Value Added grew at a slower pace of 6.2 percent in 2007 compared to 6.3 percent in 2006. However, exports of manufactured products continued to rise during the same period. Growth in business investment on the other hand led to increased output in manufacturing. For some of the sub-sectors such as cement production, metal and paints manufacture, the sustained growth is mainly attributed to an upturn in the building and construction sector. For example, the total value of new private buildings completed in 2007 is estimated at 5.9 billion shillings, which is well above the previous year’s estimate of 2.7 billion shillings.

As a result of these investments, as well as investments in infrastructure development, the building and construction sector grew by 6.9 percent in 2007, from 6.3 percent the previous year. Accordingly, the indicators are good for the cement subsector, and its future remains bright. For instance, the construction boom is continuing both in the country and the region. Furthermore, as a result of diversification of products, increased capacity utilization and establishment of new processing plants, the sector has continued to maintain impressive growth levels.

Ladies and Gentlemen,

Kenya’s VISION TWENTY THIRTY envisages making Kenya the provider of choice for basic manufactured goods in eastern and central Africa, before breaking into other markets. This will be done through improved efficiency and competitiveness at the level of individual firms. Kenya’s goal for 2012 is to generate an additional 30 billion shillings to GDP by producing consumer goods that compete with imports. We also target raising our regional market share from 7 percent to 15 percent and promote investment in strategic agro-processing industries, targeting local and international markets. Specific strategies will involve restructuring key local industries that use local raw materials to make them more competitive. We must also exploit opportunities aimed at adding value to imports that could then be re-exported.

Ladies and Gentlemen,

As you all know, Kenya’s economy remains vibrant and many of our people are looking forward to building and owning decent houses. We need to combine efforts both as government and private sector in facilitating our people to access building materials at affordable prices. Apart from the local market, there is also vast reconstruction in the neighbouring countries of Southern Sudan, Rwanda and Burundi. We must therefore lay strategies aimed at capturing the regional markets.

In addition, the VISION TWENTY THIRTY identifies a variety of flagship projects in manufacturing, housing development, water and sanitation, education and health. However, the implementation of these projects will require huge amounts of cement and other building materials. As a government, we are encouraging private sector players to invest in cement manufacture so as to ensure availability of the commodity at an affordable cost to our people.

I am particularly pleased to see that over the last few months we have received, and are processing requests from a number of investors interested in the manufacture of cement. My government welcomes the competition, which will ensure that the commodity will be competitively priced. Moreover, the establishment of new factories especially in the rural areas will catalyze the economic growth of those regions, while providing quality jobs for our young people. Above all, the growing interest in the manufacture of cement locally is a pointer to the strategic position that Kenya commands in the building and construction industry in the region.

The cement factory we are inaugurating today will complement Government’s development efforts, by making cement available and affordable to Wananchi. The provision for increase in the capacity of the cement plant will also have the potential to boost export of cement to the neighbouring countries. Indeed, I am informed that when completed, this project will have an initial production capacity of 1000 metric tonnes per day, with provision for further increase to 2500 metric tonnes per day and almost one million tonnes per annum. I am glad to see that you took up the challenge to come up with this project. When completed, it will enable you to play a major role in the supply of building and construction materials to Kenyans and the region. For example, Devki Steel Mills Ltd, which I have previously visited, is now one of the largest manufacturing plants in East and Central Africa. That is indeed commendable growth.

It is further encouraging tolearn that you will soon be commencing production of roofing sheets. Your group of companies will therefore be able to provide Kenyans with Steel, Cement and roofing materials under one roof.

Let me reiterate that the Grand Coalition Government will continue to engage investors on matters related to the industrialization, economic and social development of our country. We will continue to address any constraints facing the business sector so as to make Kenya an investment destination of choice for all investors, both local and international.

In conclusion, let me once again commend the owners of this project for demonstrating faith in Kenya’s economy and investing over 3 billion shillings in the construction of a new cement manufacturing plant. I want to assure you all of my government’s full support as you implement this project, and wish you every success.

Thank you and God Bless You