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The Construction Industry in Kenya
BY Carole Veitch
Kenya
15 March 2017
R 6 960.00 (ZAR)  
estimated $ 488.45 (USD) *
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The Construction Industry in Kenya


Infrastructure development is a central pillar of Kenya’s Vision 2030 and in 2015 the US$3bn construction sector contributed 4.8% to the Kenyan economy. The Economic Survey 2016 published by the Kenyan National Bureau of Statistics (KNBS) reported that approximately 148,000 people are formally employed in the domestic building and construction industry. Players operating in the sector range from indigenous micro-enterprises to foreign multinational civil engineering and construction giants. Although building and construction contractors are required to be registered with the National Construction Authority (NCA), a significant number of unregistered contractors operate in the informal sector.


A Sector with Promise


Currently 11 of the 43 major infrastructure projects in East Africa are in Kenya. These mega-projects include the US$3.8bn Mombasa – Nairobi Railway Project, the US$2.1bn Tatu City Project, the US$1bn Lamu Port Berths Project and the US$900m Lake Turkana Wind Power Project. Demand for housing continues to grow with role players estimating that more than 210,000 new residential units need to be built annually to keep pace with Kenya’s expanding population. With crude oil production in the Great Rift Valley set to commence in the first half of 2017, many analysts predict that the country is on the cusp of an unprecedented construction boom.


Report Coverage


The detailed report on the Kenyan construction industry focuses on opportunities and conditions in the sector, challenges and key trends, and factors influencing the industry’s success. Profiles for 22 companies are provided, including major Chinese companies such as China Communications Construction Company Limited (CCCC) and its wholly-owned subsidiary, the China Road and Bridge Corporation (CRBC), which focus on the high value civil engineering and construction market. Also profiled are local companies Spencon Holding Limited and EPCO Builders Limited, as well as Lee Construction, which has been identified by market analysts as ‘the fastest-growing indigenous construction company in Kenya.’


Page
1. INTRODUCTION 1
2. DESCRIPTION OF THE INDUSTRY 1
2.1. Industry Value Chain 2
2.2. Geographic Position 3
3. SIZE OF THE INDUSTRY 5
4. STATE OF THE INDUSTRY 10
4.1. Local 10
4.1.1. Corporate Actions 19
4.1.2. Regulations and Government Policies 20
4.2. Continental 23
4.3. International 27
5. INFLUENCING FACTORS 29
5.1. Economic Environment 29
5.2. Socio-Political and Socio-Economic Environment 31
5.3. Infrastructure Deficit 32
5.3.1. Government Infrastructure Programme Spend 33
5.3.2. Foreign Direct Investment (FDI) 33
5.3.3. Private Sector Investment 34
5.3.4. Public-Private Partnerships (PPPs) 34
5.4. Urbanisation 35
5.5. Local Content 35
5.6. Corruption 36
5.7. Construction Equipment and Materials: Capacity, Quality and Security of Supply 36
5.8. Input Costs 37
5.9. Cyclicality 37
5.10. Health and Safety Concerns 38
5.11. Technology, Research and Development (R&D) and Innovation 38
5.12. Labour 41
5.13. Environmental Concerns 43
6. COMPETITION 45
6.1. Barriers to Entry 46
6.2. Public Procurement and the Tendering Process 47
7. SWOT ANALYSIS 47
8. OUTLOOK 48
9. INDUSTRY ASSOCIATIONS 48
10. REFERENCES 49
10.1. Publications 49
10.2. Websites 50
APPENDIX 1 52
The Global Competitiveness Index 2016-2017: Kenya 52
APPENDIX 2 53
National Priority List of Public-Private Partnership (PPP) Projects 53
COMPANY PROFILES 55
ATLAS DEVELOPMENT & SUPPORT SERVICES LTD 55
CHINA JIANGXI INTERNATIONAL KENYA LTD 59
CHINA OVERSEAS ENGINEERING GROUP COMPANY LTD 60
CHINA WU YI COMPANY LTD 62
CHINA ZHONGXING CONSTRUCTION COMPANY LTD 64
ECO-HOMES LTD 65
EPCO BUILDERS LTD 66
FUBECO (CHINA FUSHUN) LTD 68
INTEX CONSTRUCTION LTD 70
KENYA RAILWAYS CORPORATION 72
KOTO HOUSING KENYA LTD 75
LEE CONSTRUCTION LTD 77
MEINHARDT (SINGAPORE) PTE LTD 78
MOHA KENYA LTD 80
MULJI DEVRAJ & BROTHERS LTD 82
NATIONAL HOUSING CORPORATION 84
NJUCA CONSOLIDATED COMPANY LTD 86
ORIENTAL CONSTRUCTION KENYA LTD 88
PARBAT SIYANI CONSTRUCTION LTD 90
PRISM CONSTRUCTION COMPANY LTD 92
SPENCON HOLDINGS LTD 94
VICTORY CONSTRUCTION COMPANY LTD 96