19 February 2014

Kenya: Cement Sales Hit By South Sudan Power Struggle

The ongoing South Sudan conflict and high energy costs in the country has led to a decline in profits for cement manufacturers.

Savanna Cement managing director Ronald Ndegwa said the conflict has led to a decline in exports while rising power bills has pushed up production costs.

Ndegwa said South Sudan has been their key export market, accounting for 98 per cent of total cement sales for the financial year 2013, but they encountered a reduction in sales from mid December when the conflict rocked Juba.

"Our headroom was good throughout last year as we closed sales at 320, 000 metric tonnes and we are optimistic on doubling sales this year because the subsiding conflict in South Sudan resulted to an upsurge in exports at the end of January," Ndegwa said during the signing of an agreement with Sperkejet East Africa and SAP Africa for the installation of SAP Hana Enterprise Resource Planning software in Nairobi.

He said that the software is aimed at enhancing efficiency in addressing customer needs and improving production, adding that their new cement plant in Athi River is employing green technology such as coal fuel in order to reduce the cost of manufacturing a tonne of cement and pollution.

The cement maker added that they are hoping to reap huge profits this financial year from the Kenyan market, as they have closed deals to provide cement for the construction of various multimillion projects like the Garden City Mall, Green Field Airport Terminal, 24 storey building for the University of Nairobi, and the Sh1 billion mall in Nyeri County.

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