ETHIOPIA: Leads the East African cement market

Amongst the countries in East Africa, Ethiopia leads in terms of regional cement output (12.6 million MT per year).

It has overtaken Kenya, which historically dominated regional output, producing the equivalent of 7.4 million MT per year in 2012-13.

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

The output among East African countries is 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 MT 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 MT per year, all of which it consumes.

Nigeria and South Africa remain the leading sub-Saharan cement producers, with 25% and 16% of the total market share, while Ethiopia and Kenya account for 11% and 6% of the total market share respectively.

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

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

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

The 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 $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, both Nigeria and Ethiopia are on track to become net exporters of cement in the near future.