“The government has commissioned
a feasibility study for an offshore jetty
facility to reduce congestion and receipt
of larger vessels with the National Oil
Corporation of Kenya championing the
construction of this facility through a
Public Private Partnership,” a release by
the Energy ministry said previously.
The country is also ready to implement the Lamu Port project Master
Plan, which among other components
is comprised of 32 berths at the city
of Lamu for export of crude oil from
South Sudan. Initial preparations for
construction of initial three berths and
associated port infrastructure is said to
be underway according to the ministry’s release.
In addition, the Kenya Pipeline
Company has commissioned a feasibility
study to replace the current Mombasa-Nairobi product oil pipeline. It also plans
to construct a 14-inch spur-line to Kisumu
City in Western Kenya to complement an
existing 6-inch multi-product oil pipeline
with plans and negotiations underway to
extend the pipeline into Uganda and later
to Rwanda.
“Another multi-product oil pipeline is
planned to be constructed from Nakuru
town in Western Kenya to Isiolo town to
serve Central Kenya demand,” the ministry said.
A crude oil pipeline from South Sudan
to Lamu in Kenya via Isiolo and refined
products multi-product oil pipeline from
Isiolo to Ethiopia has also been planned
for construction. Similarly, a new refinery
is planned to be set up at Isiolo to process
crude oil from South Sudan and Kenyan
crude oil in case it is commercially viable.
Modernization of the Kenya Petroleum
Refineries Ltd currently operating at 40
percent of its design capacity to process
four million tons is expected to be completed by 2015.
Kenya’s overall spending on infra-
structure went up by 21 percent last year
to Sh268.1 billion ($3 billion) up from
the Sh221 billion ($2.5 billion) in 2012.
Finance minister Henry Rotich said the
infrastructure investments “are the build-
ing blocks needed to achieve a more last-
ing stable growth.”
“Over the past two financial years
infrastructure expenditure allocation
has increased by more than 62 percent,
a show of government desire to improve
infrastructure that has often been cited
by the private sector as one of the im-
pediments to Kenya’s economic competi-
tiveness,” said PricewaterhouseCoopers
post-budget analysis on Kenya’s 2013
national budget.
A similar growth in infrastructure
expenditure has been seen in South
Africa over the past two years with the
government of President Jacob Zuma
announcing an anticipated expenditure
of R847 billion ($78 billion) in the next
three years. Outgoing Finance minister Pravin Gordhan said in February
the government has spent R1.1 trillion
($102 billion) on infrastructure since
2009 especially on rail projects, considered a key consumer of paints and coatings products.
“Transnet (state rail operator) has increased capacity on its coal line. Plans are
in place to further expand the coal, iron
ore and manganese lines. The Passenger
Rail Agency of South Africa refurbished
500 Metrorail coaches last year, and
its new rolling stock procurement programme will get under way this year,”
said Gordhan.
“The private sector is also making an
increasing contribution to infrastructure
investment,” added Gordhan.
However, it is Nigeria, which Frost &
Sullivan said “presents the most oppor-
tunities due to the Government’s success
in stimulating private and public involve-
ment in development projects.”
“With the expected rollout of several
new development projects by the gov-
ernment as well as private players, the
local production capacity utilisation of
paints and coatings in Nigeria will in-
crease significantly from its 2010 level
of 35 to 40 percent,” said Lawrence.
The analysis seems to concur with
an earlier one by Business Monitor
International (BMI) which said Nigeria’s
residential and non-residential building
“will be the major driver of growth, with
a growing middle class demanding more
from the sector.”
“Improving power supply and trans-
port links will also be a driver of growth,
The combined Kenya, South Africa
and Nigeria sales volume of industrial
paints and coatings across the three
countries stood at 101.2 million liters in
2012 according to the Frost & Sullivan
study, which is yet to be released of-
ficially and covers wood, powder, can
and coil, marine, and industrial protec-
tive coatings.
“This is estimated to reach 142.1 million liters in 2017,” the study said.
The market analyst, however, cautions on the impact of the rising price of
raw materials which it says is likely to
push up the cost of industrial paint and
coating production.
“The fluctuating exchange rates are
also a cause for concern especially for
Kenyan industry participants, as most
raw materials used in the manufacturing of paints and coatings are imported,” it said.
It also singles out South Africa paints
and coatings market players of being at
risk of losing customers to “the influx of
competitively-priced paints and coatings
into South Africa from countries such as
China and India is diverting customers
from local manufacturers.”
“To remain competitive, local
participants in the South African,
Nigerian and Kenyan industrial paints
and coatings markets should offer
products with a high price-perfor-
mance ratio and ensure availability,”
the study said.“They must also pro-
vide robust customer service and tech-
nical support to build and strengthen
relationships with suppliers, add val-
ue, and retain customers.”
According to Lawrence local market
participants “should consider affiliat-
ing with well-established international
brands in order to maintain high qual-
ity, while respecting the relevant health
standards, as well as obtain environ-
mental compliance accreditation. These
affiliations will also assist in making
customers completely aware of the
grades of paints and coatings so that
they can use the right product for the
right application.” CW
