Displaying items by tag: Bamburi
Kenya: Kenya's antitrust authority may force Lafarge to sell some of its interests in the country if the cement maker is found to be flouting domestic competition rules.
The Competition Authority of Kenya (CAK) is probing Lafarge's influence on Kenya's cement industry through its 59% stake in Bamburi Cement and 42% shareholding in East Africa Portland Cement Co (EAPCC). The findings will be published in June 2014, according to the CAK's director general Francis Kariuki.
"The current arrangement between Lafarge and EAPCC may be deemed to be an unwarranted concentration of economic power because of the close directorship Lafarge has in EAPCC and Bamburi," said Kariuki. The CAK is investigating pricing in the Kenyan cement industry amid a dispute between shareholders and the government over ownership of EAPCC. Kenya's Treasury holds a 25% stake in the company, while the state-owned National Social Security Fund has 27%.
The government wants Lafarge to dilute its shareholding in EAPCC because no company should hold a 'monopolistic stake' in Kenyan industries, according to Industrialisation and Enterprise Development permanent secretary Wilson Songa. Cross-shareholdings are 'widely recognised to dampen competition,' according to the CAK. Bamburi Cement, in which Lafarge has a controlling stake, owns 12.5% of EAPCC. "Even passive shareholdings change the incentives to set prices, as some of the earnings from sales diverted to a rival are now internalised," said the CAK.
If Lafarge is found to have a monopolistic position in Kenya, the CAK may force Lafarge to sell its stake in one of its businesses in the country, according to Kariuki. Kenyan law also stipulates that anyone found guilty of price fixing faces a US$115,000 fine or a five-year jail term.
Lafarge faces price-fixing penalties
25 April 2014Kenya: Lafarge could face penalties by the Competition Authority of Kenya (CAK) for suspected price-fixing. CAK has accused Lafarge of possible price-fixing owing to its cross-directorship in East African Portland Cement Company (EAPCC) and Bamburi Cement. Lafarge has a 41.7% stake in EAPCC and a 58.9% stake in Bamburi.
"Cross-shareholdings such as these are widely recognised to dampen competition," said CAK. "Even passive shareholdings change the incentives to set prices, as some of the earnings from sales diverted to a rival are now internalised."
CAK is expected to rule in June 2014 as to whether or not Lafarge is culpable of having 'Unwarranted concentration of economic power.' If found guilty, CAK could force Lafarge to sell off its stake in one of the businesses. The Competition Act (No 12 of 2010) also stipulates that Lafarge directors, if found guilty of price fixing, could be forced to pay up to US$115,000 in fines or serve five-year jail terms.
The report comes four months after the Kenyan government, which together with the National Social Security Fund (NSSF) has a controlling stake of 52.3% in EAPCC, accused Lafarge of attempting to destabilise the cement maker to protect its interests in Bamburi. Lafarge countered that its minority stake in EAPCC is insufficient to exert control over the firm. They added that EAPCC is a genuine competitor of Bamburi Cement and that Lafarge stands to lose if it were to destabilise EAPCC.
The director-general of CAK, Kariuki Wang'ombe, stated that the current shareholding structure is not good for fair business. "Cross-directorship could lead to price-fixing since this creates a position where a competitor is privy to the strategic decisions of another competitor. However, it is not conclusive that there is price-fixing going on," said Wang'ombe.
Bamburi signs partnership for solid waste treatment
20 February 2014Kenya: Bamburi Cement and the Mombasa County Government have entered into a US$55.6m partnership to develop a solid waste management system for the Mombasa county.
The deal will see Bamburi finance a feasibility study and provide equipment to boost the Mombasa waste management capacity. Most of the waste will be used to generate alternative fuel for the manufacture of cement.
Kenya: Bamburi Cement expects a robust second half of 2013 according to Reuters, after it saw its pretax profit drop by 12% in the first half of 2013. It attributed the decline to uncertainty over the Kenyan elections and a slowdown in its export markets.
Bamburi, which is controlled by the French multinational cement giant Lafarge, posted a first-half pretax profit of US$37.46m, while its turnover declined by 18% to US$180.8m.
"We started seeing a significant turnaround in the markets of Kenya and Uganda with continued signs of an improving macro-economic environment in both countries," said the company. "The group is therefore strongly optimistic of a stronger second half."
Hima Cement completes bag filter upgrade
10 July 2013Uganda: Hima Cement has completed the installation of new bag filter technology at its Kasese plant. The US$3.2m bag filter technology investment is geared towards bringing the stack emissions in line with the global environmental standards.
"We invested significant resources to conduct environmental impact assessments to ensure that the plant operations met all the required environmental standards for its manufacturing processes and operations," said Peter Robson, Hima Cement's Plant Manager.
Hima Ciment, part of Bamburi Cement that in turn is a subsidiary of Lafarge, expects the plant's target emissions to be below Lafarge's industrial targets. Further testing is expected to be completed by the end of July 2013. Project manager Jackson Molo added that Bamburi Cement achieved 0.01mg/m3 emissions with the same technology at a plant in Mombasa in 2012. The Kasese plant has a cement production capacity of 0.85Mt/yr.
Bamburi Cement profit drops 15% to US$83.3m
06 March 2013Kenya: Bamburi Cement has posted a 15% drop in pretax profit to US$83.3m in 2012. The figure was hit by lower gains on its foreign currency holdings the Kenyan based Lafarge subsidiary reported to Reuters. Turnover rose by 4% to US$437m, but higher costs drove operating profit down by 14%.
"The group anticipates underlying cement demand to continue growing in the region despite a slow start in Kenya influenced by the election period, supported by improved political stability in the inland Africa export markets," said Bamburi in a statement.
The Kenyan Shilling was stable against the US Dollar during 2012, having weakened sharply in the previous period, thus accounting for the lower gains on foreign exchange holdings by the firm.
Lafarge Bamburi profit down on squeezed margins
08 August 2012Kenya: Lafarge Bamburi Group has posted a 13% drop in its pre-tax profit to stand at US$43.9m for the six months ending 30 June 2012. The group's operating profit was down by 9% to US$42.7m. Both were negatively impacted by continued volatility of global fuel prices, resulting in higher raw material, transport and power costs.
This was further aggravated by the removal of a government power subsidy in Uganda that led to a 70% increase in power prices, which affected the company's Ugandan subsidiary Hima Cement.
Lafarge Bamburi's turnover rose by 17% percent to US$228m, while cash generated from operations during the period under review amounted to US$60.6m, 33% higher than what was generated in 2011.
"The regional cement market will continue to be vibrant," said the company in a statement. "The focus will be on retaining the upward trend of revenue growth. The group will continue to capitalise on progress made in its cost control measures to cushion the top line."
Bamburi profit increases due to new subsidiary and stability
29 February 2012Kenya: Profits at Bamburi Cement rose by 12% in 2011 backed by stronger revenues from the domestic market and its newly-expanded Ugandan subsidiary. The company earned a pre-tax profit of US$102m in 2011 compared to US$91m in 2010. The group's turnover increased by 28% to US$433m in 2011 from US$338m in 2010. Given pricing pressure in Kenya, Bamburi's main market, the better than expected revenue growth was mainly supported by increased volume sales from the company's Ugandan subsidiary, which was expanded in the last quarter of 2010.
"2011 was characterised by stable domestic prices and better export prices, due to the appreciation of the US dollar,"said Hussein Mansi, Bamburi's managing director. However, the company, like many others worldwide, suffered from a jump in power costs. For this reason, the company is still cautious regarding the local and global macroeconomic environment for 2012. "The uncertain political environment in Kenya continues to make visibility difficult," said Mansi.