Stiff competition in the Kenyan cement market prompted East Africa Portland Cement Company to venture into Tanzania and add a new production plant in Kenya as it seeks to improve sales and upgrade equipment, VenturesAfrica reports.

East Africa Portland Cement’s market share dropped from 34 percent to 21 percent in three years, according to the report. It’s counting on entry into Tanzania to grow market share and revenue.

But Tanzania’s getting crowded too. Nigeria-based Dangote Cement, Africa’s largest cement producer, has continent-wide expansion plans that may further derail East Africa Portland Cement’s regional push, according to the report. Dangote has a $500-million cement factory under construction at Mtwara, Southeastern Tanzania, with plans to build a $400-million plant in Kenya with a daily capacity of about 5,500 tonnes.

Despite increased competition in the East African cement market, Pradeep Paunrana is optimistic it won’t reduce market share at Nairobi Securities Exchange-listed ARM Cement.

“In Kenya and East Africa generally, our cement consumption per capita has been very low,” said Paunrana, managing director of ARM. “As our economies are improving, as our aspirations of development are changing with more educated young people, we want more housing, more roads, more infrastructure… all these ultimately require a lot more cement.”

East Africa Portland Cement is looking at Northern Tanzania and has identified a partner in Arusha, said Managing Director Kepha Tande Friday during a media briefing with new company Chairman Bill Lay.

Stiff competition in the Kenyan cement — less demand and excess supply — prompted the move, Tande said.

East Africa Portland Cement was hit hard by local competition and shareholder wrangling, resulting in a 13-percent market-share decline, VenturesAfrica reports. It was also forced to halt its business in South Sudan after an attempted coup in December.

“Going by Dangote Cement’s financial muscle and aggressiveness, an unprecedented battle could be in the offing,” said investment analysts at Old Mutual Securities in a 2013 research report.

Although a construction boom has fueled demand for cement in East African countries like Kenya, Dangote’s entry into the market is expected to heighten competition and tighten sales growth.

Other cement makers have expanded operations amid increasing demand in some parts of East Africa.

ARM Cement announced it was seeking $300 million to build a factory in Kitui town, about 180 kilometers east of Nairobi, that will produce 8,000 tonnes of cement daily.

Other companies that are pumping millions of dollars into new projects include National Cement, Mombasa Cement and Savannah Cement.