Kenya's Cement and Steel Industries: The Building Blocks of East Africa's Construction Boom

Kenya's cement and steel industries form the backbone of East Africa's construction sector, supplying the critical materials that underpin infrastructure development, affordable housing programmes, commercial real estate, and industrial expansion across the region. With cement production surging 17.3 percent to 4.9 million tonnes in the first half of 2025 and a KES 50 billion state-of-the-art steel plant opening in Kwale, these industries are entering a transformative phase driven by massive capital investments, growing regional demand, and government policy initiatives that prioritise local manufacturing and value addition.

Kenya's Cement Industry Overview

Kenya's cement sector is one of the most developed in sub-Saharan Africa, with an installed production capacity exceeding 14 million tonnes per annum across multiple manufacturers. The industry expanded significantly in the first half of 2025, with production rising 17.3 percent to 4.9 million tonnes, while domestic consumption surged 22.1 percent, driven by major infrastructure projects, expanding affordable housing construction, lower lending rates, and a stabilising shilling that reduced import costs for manufacturing inputs.

The sector is dominated by several major producers. Bamburi Cement, now owned by Tanzania's Amsons Group following a landmark acquisition, operates plants in Mombasa and Athi River with a combined cement production capacity of 1.8 million tonnes annually. East African Portland Cement Company (EAPCC), one of Kenya's oldest industrial companies, operates from Athi River with plans to increase annual production capacity from 1.3 million tonnes to nearly 4 million tonnes within the next three years. Other significant players include Mombasa Cement, Savannah Cement, National Cement, and ARM Cement (now part of the CDC Group-backed NCBA portfolio).

Major Cement Industry Investments

Bamburi Cement signed an Engineering, Procurement and Construction (EPC) contract with China's Sinoma CBMI Construction Co. Ltd in December 2025 for the development of a KES 32 billion clinker manufacturing plant in Matuga, Kwale County. The new plant will have an annual clinker capacity of 1.6 million tonnes, lifting Bamburi's total clinker capacity from one million to 2.6 million tonnes, while cement production is expected to rise from 1.8 million to 3.4 million tonnes annually. This investment represents the largest single capital expenditure in Kenya's cement industry in decades.

The expansion is driven by growing demand from Kenya's affordable housing programme, which targets the construction of 200,000 housing units annually, and major infrastructure projects including the Rironi-Mau Summit Road, the JKIA expansion, and various county government road and water projects. Regional demand from Uganda, Tanzania, Rwanda, South Sudan, and the Democratic Republic of Congo further supports the investment case for expanded production capacity.

Kenya's Steel Industry

Devki Steel Mills Limited, part of the Devki Group, dominates Kenya's steel sector with a market share exceeding 50 percent. The company operates manufacturing facilities in Ruiru, Athi River, and Mombasa, producing a comprehensive range of steel products including reinforcement bars (rebars), structural steel sections, steel tubes and pipes, wire products, and roofing sheets. The Devki Group, founded by industrialist Narendra Raval, has grown over more than two decades into the largest multi-product steel manufacturer in Kenya.

The landmark opening of a KES 50 billion state-of-the-art raw steel production factory in Samburu-Chengoni, Kwale County, represents a transformative moment for Kenya's steel industry. The facility, one of the largest in East and Central Africa, has an annual production capacity of 500,000 tonnes of steel and is connected to the metre-gauge railway, reducing transport costs to other parts of Kenya and the region. The project is expected to generate 2,500 direct and 9,000 indirect jobs, primarily benefiting communities in Kwale, Mombasa, Kilifi, and Taita Taveta counties.

Other Major Steel Manufacturers

Beyond Devki, Kenya's steel sector includes several other significant manufacturers. Tononoka Steels, one of Kenya's established steel producers, manufactures galvanised roofing sheets, steel tubes, and hollow sections from its Mombasa and Nairobi facilities. Steel Structures Limited (SSL) specialises in structural steelwork fabrication for commercial and industrial buildings. Apex Steel, Corrugated Sheets Limited (CSL), and Blue Nile Wire Products serve various segments of the construction and manufacturing supply chain.

The steel industry relies heavily on both locally sourced scrap metal and imported billets and hot-rolled coils for raw material supply. Kenya's scrap metal sector, while substantial, has faced regulatory challenges around the Scrap Metal Act, which governs collection, processing, and export to prevent theft of infrastructure materials. Import dependency for primary steel inputs exposes the industry to global commodity price fluctuations and shipping cost volatility.

Infrastructure and Housing Demand Drivers

Kenya's ambitious infrastructure programme provides the primary demand driver for both cement and steel. The government's affordable housing initiative under the Kenya Mortgage Refinance Company framework, Vision 2030 infrastructure targets, county government development projects, and private sector commercial construction all contribute to sustained demand growth. The construction sector's contribution to GDP has increased steadily, with the Kenya National Bureau of Statistics reporting growth in building permits, cement consumption, and credit to the construction sector.

Regional infrastructure projects, including the Lake Victoria Ring Road, the Lamu Port-South Sudan-Ethiopia Transport Corridor (LAPSSET), and various East African Community cross-border transport initiatives, create additional export opportunities for Kenyan cement and steel manufacturers positioned along key logistics corridors.

Challenges Facing Both Industries

Energy costs represent the most significant operational challenge for both cement and steel manufacturers. Cement production, particularly clinker manufacturing, is energy-intensive, with kiln operations consuming substantial quantities of coal, petroleum coke, and electricity. Steel manufacturing requires electric arc furnaces that consume large amounts of power. Both industries have invested in alternative energy solutions, with Bamburi and Mombasa Cement exploring solar power and captive generation to reduce reliance on the national grid.

Competition from cheap imports, particularly from China, India, and Turkey, pressures local manufacturers on price, though quality concerns and Buy Kenya Build Kenya initiatives provide some protection for domestic producers. Environmental regulations around carbon emissions, dust pollution, and mining rehabilitation are increasingly stringent, requiring significant investment in emission control technologies and sustainable production practices.

Regional Expansion and Future Outlook

Kenyan cement and steel manufacturers are increasingly looking beyond domestic borders for growth. Devki Group broke ground on a USD 500 million steel plant in Tororo, Uganda, in November 2025, with Presidents Museveni of Uganda, Ruto of Kenya, and Kagame of Rwanda attending the ceremony, signalling the strategic importance of regional industrial development. Bamburi Cement's new Kwale plant is strategically located near Mombasa port, facilitating exports to regional markets. With sustained urbanisation driving construction demand across East Africa and government policies increasingly favouring local content, Kenya's cement and steel industries are positioned for continued expansion as the region's dominant industrial materials suppliers.