Cement firms get four years to prepare for clinker import duty increase
An industry-led initiative to resolve a proposal to increase import duty on clinker, a major ingredient in cement production from 10 per cent to 25 per cent, has given players in the industry a four-year grace period before the duty is increased.
Constituted by Kenya Association of Manufacturers (KAM), the National Independent Verification Committee said grace period will enable non-integrated companies and those with ongoing expansions to set up and operationalise their clinker facilities to achieve self-sufficiency for production in terms of quantity and quality.
Import duty increment was proposed by some stakeholders in the cement industry, citing the sufficient capacity to supply the aggregate local demand for clinker in the country.
Subsequently, the proposal was opposed by a cross-section of players in the same industry, with concerns that it would distort the market and set the stage for unfair competition.
“KAM will continue to exercise its Policy Advocacy mandate to ensure that local capacity is increased and that the local content policy is adhered to, to promote a competitive manufacturing sector,” said chairman Mucai Kunyiha in a statement yesterday.
On Sunday, National Cement company said it was considering laying off 860 workers at its Emali-based clinker plant due to low business, citing increased imports of the raw materials, leading to unused capacity.
“We had hired additional staff in line with our expanded clinker capacity so as to satisfy local demand, but imports are eating into this market.
It is therefore difficult to sustain jobs when there is no demand to allow us to operate at full capacity, said Narendra Raval, Devki Group chair.