The State is moving in to make imports of the good more expensive, and the proposal to implement a new tax will help local manufacturers of clinker, a key component in the production of cement.
If approved by the Parliament, the charge will increase the import duty on clinker by 10%, making it more expensive and unattractive compared to locally manufactured clinker. The product is imported by cement manufacturers without clinker factories, leading proposals to increase the import duty from 10% to 25% to make it more expensive than clinker obtained locally.
“The tax levels the playing field because high electricity costs make locally produced clinker more expensive by between five to 10 percent,” Narendra Raval, chairman of the Devki Group that owns Simba Cement and National Cement
In the previous year, clinker imports decreased by 38.4% to 656,499 tonnes. Over the same time period, imports fell 24% to Sh5 billion. Because there aren’t many grinders available, most Kenyan cement producers import clinker, mostly from Egypt.
In an effort to promote domestic production, cement companies with grinders have repeatedly pushed for higher clinker levies. They believe they can meet Kenya’s clinker needs.
Several cement manufacturers, such as Savannah Clinker and Simba Cement, have declared plans to build clinker mills for a combined Sh136 billion in the upcoming years. In August, the building is anticipated to be completed.
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