Why prices of cement, steel have doubled

Cement manufacturers have blamed the rise in cement prices on higher costs for raw materials and inputs.

Speaking to the Nation, the manufacturers said the costs of raw materials continue to increase disproportionally against what they can absorb. This has forced them to pass some of the cost to the market.

“We have been forced to increase our prices because of high taxation, the cost of electricity is high, the fuel price is high, and importation of raw materials like concrete admixtures has also risen. Everything is just rising,” said a representative of the Kenya Federation of Master Builders.

Concrete admixtures are natural or manufactured chemicals or additives used in concrete mixing to enhance specific properties of the fresh or hardened concrete, such as workability, durability, or early and final strength.

According to the representative, cement firms are struggling to compete with counterfeit cheap cement available in the local market.

The drastic increase in the price of essential products in construction like cement, iron sheets and deformed steel bars have forced many to halt their projects or dig deeper into their pockets.

Many hardware stores in Eastlands, South B, Kawangware and Ngara had no cement in stock in Nairobi. Many promised to get the product later in the day but even that was impossible.

"I bought a bag of cement for Sh550 in Kawangware at the end of January. Today they sell the same cement for Sh710 in the same shop," said James Mwangi.

Mr Mwangi said he will suspend his project and wait for the prices to drop soon.

"We currently do not have cement in stock but we are expecting to get it in the afternoon. Kindly check with us around 2pm," one seller in Kawangware told the Nation.

Hardware shops with cement had put limits on how many bags one could purchase, making it hard for small projects looking for fewer bags of the product to continue.

Linda Atieno, of Rongai, wanted to buy 10 bags of cement to finish a small project at her home. But every hardware store she walked into demanded that she buy at least 30 bags.

"I needed cement to finish a small part of my house I was renovating, but from Monday, I have been moving around as no one wants to sell 10 bags,” she said.

“According to the sellers, they don't have the cement in stock, they have to make an order from the supplier and they can't order just 10 bags."

In the North Rift region, cement retails for up to Sh1,000 in some parts.

In Nairobi, the most common cement is Simba, retailing for between Sh680 and Sh750.

Same products

Vendors were selling steel bars for the following prices: D8 –  Sh780; D10 – Sh1,150; D12 – Sh1,650; D16 – Sh2,750; and D20 – Sh4,850.
In January, these were the prices of the same products: D8 – Sh450; D10 – Sh600; D12 – Sh900; D16 – Sh1050; and D20 – Sh2500.

The situation has been complicated by construction workers (fundis) asking for higher pay.

The high prices have forced builders to suspend construction plans as they take a 'wait-and-see’ approach, hoping the prices will drop.

Mr Victor Kangogo, a contractor and the secretary of the Baringo Contractors Association, says the scenario has disadvantaged people contracted to carry out government projects with relatively low quotations.

He cited projects like the Competency-Based Curriculum (CBC) classes that would domicile junior secondary school that cost Sh788,000 and classes funded by the National Government Constituency Development Fund (NGCDF) that cost Sh900,000.

"The cost of construction materials hit the ceiling last month, which would disadvantage contractors who are yet to complete their projects because there is a likelihood they would suffer losses," he said.

For instance, he said, cement that sold for Sh600 a month ago is now going for Sh750, while a two-metre iron sheet that was trading for Sh700 now costs Sh850.

"The public works department should review the rates because the cost of materials is not commensurate with the cost of the projects," Mr Kangogo said.

In Nandi, the high cost of cement and other building materials is frustrating contractors, who are being rendered jobless.

Another contractor

Mr Joseph Wafula, another contractor, says the high cement price has prompted those who wanted to build new houses to put off their plans for the past three months.

"Cement prices have increased from Sh650 to Sh900 per bag, while the prices of iron sheets have increased by about Sh200," he said.

In Turkana, it is not just the question of the high cost of construction materials but also higher costs of transportation to centres and villages off the main Lodwar-Juba highway connecting Kenya and South Sudan.

In Lodwar, the cost of a 50kg bag of cement has risen from Sh750 on Sunday to the current Sh1,000.

Mr Philip Epakan said that the cost is much higher in far-flung villages in Turkana North, Loima, and Turkana West sub-counties, as contractors and locals building residential houses or working on community projects must pay for transportation.

"For saving, most constructors buy such materials from major towns like Kitale and Eldoret at much lower prices and subsidised transportation costs," Mr Epakan said.

Mr Isaac Kide, a roads contractor, said the cost of timber and metal has gone up drastically.

"One inch of cypress timber goes at Sh40 and Y20 metal is now Sh25,000. Metals for windows and doors are very expensive,” he said.
“Gypsum boards now go at Sh1,300. The 29-gauge modern iron sheets go at Sh800 per metre, but you must buy from Eldoret or Nairobi. The normal iron sheet goes for Sh850."

The situation was no different in Mombasa County and its environs, where customers have witnessed skyrocketing costs of building materials.

Wamwala Hardware proprietor Henry Mutua Kingee, from Bombolulu, Mombasa County, says the recent hike in building and construction materials is a setback for the construction business.

"The economy is doing badly, and customers have stopped construction; those making purchases are doing finishings for their houses. Construction works in the region have stagnated in the last two months," Mr Mutua said.

Steel rods

He noted that the high costs of cement and steel had been felt, with the prices of the latter having doubled.

The prices of D8, D10, and D12 steel rods range between Sh800 and Sh1,800.

The Nation has also learnt that cement prices have gone up by between Sh20 and Sh40 (Rhino: Sh560-Sh580; Mombasa Cement Sh560-Sh580; Bamburi: Sh580-Sh620) in hardware stores in Mombasa County.

Mr Nadeem Jashirazi, of Hardware Professors Ltd, expressed similar sentiments about higher prices for building and construction materials.

He said he was expecting prices to rise even higher following the increase in fuel prices two weeks ago.

"Things are going up. Fuel is up, and it translates to a hike in prices. We have witnessed a drop in the number of customers,” he said.

“If the prices stayed the same, we would not be unfair to customers as they come and ask for a quotation and go back to do homework and adjust their budgets."

In the Western region, construction materials have gone up by more than 50 percent in the last two months.

Contractors must now revise their initial plans by factoring in the dramatic increase in the prices of materials.

Dr Billy Nyonje, a contractor in Vihiga County, said he had to start thinking anew about his projects.

"We have gone back to the drawing board because the current cost of building materials has more than doubled, affecting our work."

In Busia town, a 50kg bag of cement has gone up from Sh590 to Sh900, while the price of a 20-foot D10 steel bar has shot up from Sh600 to Sh1,250. The D16 steel bar, another fast-moving construction material, has increased from Sh1,280 to Sh3,100.

Mr James Nyongesa, the owner of Baraka Hardware, said the construction industry is facing tough times.

In Kakamega town, leading hardware shops indicate the price of a bag of cement had shot up from Sh550 two months ago to Sh850.

Raise the prices

The prices of iron sheets and steel bars have also shot up by more than 50 percent.

Mr Mwenda Riungu, who sells ceramics in Meru town, said suppliers had given them a notice that they would raise the prices of all products by 15 percent starting on April 5, which is also expected to increase the cost of finishings for a house.

"A carton of tiles costing about Sh840 will from April 5 cost Sh990. Our suppliers say that the increase in prices is due to the cost of production," Mr Riungu.

Kenya National Chamber of Commerce and Industry (KNCCI) Moyale chapter official Ali Nur said the prices of building materials in northern counties had shot up by over 100 percent, which he attributed to rising fuel costs.

He said a bag of cement they used to buy for Sh750 now retails at Sh980, while one square foot of two by two-inch timber commonly used for construction now sells for Sh200, up from Sh140.

"Also, a 10-tonne lorry of river sand that we used to buy for Sh5,000 is now being sold at Sh10,000 while the cost of steel iron bars has also shot up by over 100 per cent," he said by phone.

By Amina Wako, Wachira Mwangi, Gitonga Marete, Derick Luvega, Okong'o Oduya, Florah Koech, Tom Matoke, Sammy Lutta, and Oscar Kakai