Cement prices in the East African region are likely to fall significantly this year following the entry of new manufacturers into the sector.

A number of firms are set to start production in coming months while some existing cement makers plan to boost capacity to meet the growing demand.

The EAC region is on a massive infrastructure upgrade, which should push up demand for cement in coming years, as nations invest in roads, ports and bridges, railway construction and energy projects.

The latest entrant is Cemtech Ltd which is expected to begin construction of a plant in West Pokot in Kenya’s Rift Valley, with an annual production capacity of 1.2 million tonnes per year. This will bring to seven the total number of cement manufacturers in Kenya.

READ: Cemtech to produce 1.2m tonnes of cement in Pokot

In an interview with The EastAfrican last week, Cemtech Kenya director Rajesh Kumar Rawal said: “Geological evaluations will be complete by the end of this month and we expect construction work to start in April.”

A subsidiary of Sanghi Industries Ltd, the world’s largest cement manufacturer, the new plant will be constructed at an estimated cost of Ksh20 billion ($120 million).

Cemtech Ltd’s construction comes hot on the heels of the launch of another firm, Savannah Cement Ltd, which began production at its Athi River plant towards the end of last year.

Savannah has an annual production capacity of 1.5 million tonnes and the potential to double this output.

In its November issue of the Leading Economic Indicators, the Kenya National Bureau of Statistics said the quantity of cement produced increased by 6 per cent from 352,800 metric tonnes in September 2012 to 373,916 metric tonnes in October.

READ: Kenya’s cement production at highest level ever

However, consumption fell by 2.3 per cent from 300,432 metric tonnes in August to 293,571 metric tonnes in September of the same year.

The decline was associated with the completion of mega projects such as the Thika super highway as well as the high interest rates, which stalled many large scale construction projects.

As cement firms seek entry into the East African market and fight for a controlling stake, customers are bound to benefit from lower pricing due to price wars.

“The entry of new firms will intensify competition and consequently the price of cement is likely to drop,” said Mr Rawal.

In Kenya, current prices range between Ksh700 ($8) and Ksh750 ($8.5) per bag; in Tanzania the price is Tsh12,500 ($7.8) for imported brands and between Tsh13,000 ($8) and 15,000 ($9.3) for locally produced brands; while in Uganda, the average price was Ush32,000 ($12) as at December.

In Uganda, a surge in production is also expected with the entry of Moroto Cement whose production capacity is estimated at 3,000 metric tonnes per day.

Hima Cement, one of Uganda’s largest manufacturers, last year announced plans to double its output in 2013.

Tanzania is also expecting to enjoy a boost in cement production with the planned construction of a new manufacturing plant.

Dangote Industries Tanzania, a subsidiary of Nigeria’s Dangote Group, is setting up a plant with an output capacity of over 6,000 tonnes per day. The $535 million project at Mikindani in southern Tanzania is expected to be commissioned next year.