Displaying items by tag: EAPCC

Kenya: The Kenyan government has appointed William Lay as the new chairman of the East Africa Portland Cement Company (EAPCC), replacing Mark ole Karbolo. Making the announcement, Industrialisation and Enterprise Development Principal Secretary Wilson Songa said that the move would streamline operations at the company and mark a strategic shift in the operations of the cement manufacturer.

The move follows on-going shareholder conflict over the EAPCC between the Kenyan government and French multinational cement producer Lafarge.

Kenya: The Kenyan government has been stopped from asking French conglomerate Lafarge to dilute its stake in East Africa Portland Cement Company (EAPCC) as the High Court seeks to establish whether the cement maker is a state-owned firm.

On 6 February 2014 Justice George Odunga allowed activist Charles Omanga to oppose the government's latest bid to have Lafarge reduce its interest in EAPCC. In 2012, the Competition Authority of Kenya issued Lafarge with an ultimatum to voluntarily offload part of its shares in EAPCC or have its stake in the company diluted by force under anti-trust laws.

The court will also review recommendations of a task force appointed by President Uhuru Kenyatta, which says that EAPCC does not qualify as a state-owned company because National Social Security Fund (NSSF) shares do not belong to the state but to contributors. Omanga wants this recommendation adopted in what will see the government lose the power to appoint the chairman of EAPCC, shifting the power to French giant Lafarge.

"I have granted leave to commence judicial review in terms of requests 2a, b and d," ordered Justice Odunga. "The implementation of the decision of the presidential task force for the government to invoke the Competition Act and dilute shareholding of (Lafarge) in EAPCC is to be kept in abeyance." The requests mentioned touched on Omanga's plea for the state to be stopped from interfering with Lafarge's stake with regard to competition matters and the declaration of EAPCC as public and not state-owned.

This recommendation of the taskforce will see the state ownership in EAPCC drop below 50%, given that the government has been treating NSSF shares as its own, making the cement firm a state corporation.

The government's stake in EAPCC stands at 25% compared to NSSF's 27%, Lafarge's 41% and the remaining 6% is held by investors through the Nairobi bourse. Lafarge also owns 58.9% of Bamburi Cement and the government has accused the French firm of seeking to damage EAPCC in order to protect its interests in the rival cement maker.

EAPCC has been embroiled in a long shareholder war that is mainly centred around the government's determination to have a new team shepherd the firm, a move that has been difficult with Lafarge's upper hand in the board.

Kenya: The Competition Authority of Kenya (CAK) has recommended that Titus Naikuni stops chairing the Technical Committee of the East Africa Portland Cement Company (EAPCC) board, citing the risk that his position poses to the firm's strategic leadership in light of the fact that he represents Lafarge, which has a controlling stake in the rival Bamburi Cement.

The competition watchdog says that Lafarge's two board seats and control of strategic committees at the EAPCC amounts to anti-competitive behaviour that needs to be reviewed. Naikuni chairs the Technical Committee of the Portland board while lawyer Hamish Keith, another representative of Lafarge, is the chair of the Tender and Procurement Oversight Committee.

The authority has concluded that Lafarge's sizeable shareholding in Kenya's leading cement makers, Bamburi and the EAPCC gives it control of more than half of Kenya's cement market and amounts to monopolistic behaviour and undue concentration of economic power.

"The authority was of the view that this high market share and directorship of Lafarge in key strategic committees (tender and procurement and technical committees) at EAPCC exhibited features of unwarranted concentration of economic power," said the CAK in its 2013 annual report. The regulator made the recommendation in response to Industrialisation principal secretary Wilson Songa's December petition over Lafarge's dominance of Kenya's cement market that is linked to the French firm's multiple ownership of cement makers and its representation on Bamburi and EAPCC boards.

The move follows Songa's previous attempt to investigate directors at the EAPCC following a chaotic annual general meeting in late 2013.

Kenya: East Africa Portland Cement Co (EAPCC) boss Kephar Tande has said that the government is set to build a second cement factory in Kajiado, Athi River State.

Tande said that plans are underway for the construction of a fully-fledged cement factory in the Nooleleshuani area of Kajiado and is expected to be in operation in 2016. He said that the site is next to the limestone-rich Maasai plains, which are the major source of cement raw materials in Kajiado county that are supplied to all of the five companies based in Athi River.

"This will ensure its position in the Kenyan market remains strong and help it to eventually acquire leadership. We are currently carrying out feasibility studies for a clinker plant in Nooleleshuani near Bisil and will install a new cement mill by 2016 to increase our cement production capacity to 2Mt/yr," said Tande.

The EAPCC announcement to build a new cement plant comes a few days after cement makers increased cement prices in the wake of a new mining levy imposed by the Ministry of Mining.

Kenya: The East African Portland Cement Company (EAPCC) has adjusted its previous financial reports following the discovery of a theft of cement worth US$2m. The fraud led to the under-declaration of its overdraft by US$1.4m for cement lost in 2012, with the firm also overstating its sales and VAT payments by the same amount.

"The company lost cement worth US$1.4m and US$0.66m during the years ending 30 June 2012 and 30 June 2013 respectively through fraud, which was discovered in 2013," the EAPCC said in its latest annual report.

"The financial statements have been restated to correct these misstatements."

The Treasury and the National Social Security Fund (NSSF), which have a combined stake of 52% in the EAPCC, have questioned the accuracy of the EAPCC's accounts, which are examined by the National Audit Office and its agent Ernst & Young. The EAPCC management has disputed this claim.

In 2013, EAPCC suspended seven of its employees who were charged with allegedly stealing cement worth US$2m.

Kenya: ARM Cement is set to build Kenya's largest cement plant in Kitui County, setting it up for a fight with Nigeria's Dangote Cement, which also has plans to open a U$400m plant in the same region.

ARM says that it will raise up to US$300m to fund new plants including the planned unit in Kitui, which will produce 8000t/day (~2.5Mt/yr) of cement. This will make it the single largest cement factory in the country and places the unit ahead of the planned Dangote plant, which has a planned daily capacity of 5500t/day (~1.8Mt/yr). ARM's fund-raising will be done through a mixture of bank loans, corporate bonds and rights issues.

"We plan to start construction of the Kitui plant late in 2014. It is a major development for us," said Pradeep Paunrana, ARM's chief executive, to the Daily Press.

This announcement will re-open the fight for Kitui mines, which were the subject of a fierce court battle between ARM and Bamburi Cement in 2010. The 100km² area is rich with high-quality limestone. The East Africa Portland Cement Company (EAPCC) has also directed its management to strike a deal with Kitui County so that it can secure key raw materials and counter moves made by Dangote and local rivals.

Kenya produced 4.7Mt of cement in 2012, up from 2.8Mt in 2008, according to the Kenya National Bureau of Statistics. With double-digit cement market growth expected in the coming years, Kenya has caught the eye of Dangote Cement and new entrants National Cement and Mombasa Cement as well as the established players.

Kenya: The Ministry of Industrialisation and Enterprise Development has recommended that the East African Portland Cement (EAPCC) directors be investigated over a chaotic annual general meeting held on 17 December 2013.

Wilson Songa, principal secretary of the Ministry of Industrialisation and Enterprise Development, said that the conduct of EAPCC chairman and board members, including chief executive Kepha Tande and directors Titus Naikuni and Hamish Keith and company secretary J Maonga should be investigated in relation to the AGM.

Songa argued that the AGM should be declared a sham and the company was directed by the CMA not to affect any of the resolutions passed at the meeting. Songa wants the CMA to order EAPCC to reconvene the AGM and an independent person nominated by the capital markets regulator to oversee the meeting. Songa also wants the CMA to confirm that the nomination and election of Didier Tresarrieu as a director was null and void since it was not carried out in accordance with articles of the company.

The current stand-off re-ignites a long-running battle for the control of the cement maker between the government and France's Lafarge. The Treasury holds a 25% stake in EAPCC while NSSF holds 27% shareholding. This gives the government a 52% stake in the company, which has seen it ranked as a state corporation.

Kenya: The East African Portland Cement Company (EAPCC) has reported a net profit of US$28m for its financial year that ended on 30 June 2013. In the previous year the company reported a loss of US$11m. Revenue grew by 8% year-on-year to US$108bn. The improvement was attributed to improved sales and cost cutting.

"The results were lifted partly by a tax credit of US$4.2m and a US$8.4m net gain from revaluation of free hold property," said EAPCC Managing Director Kephar Tande. He added that turnover grew while the cost of sales fell due to cost management and a rationalisation of operational activities. Speaking generally, Tande said that the EAPCC is relying on increased infrastructure projects in Kenya to lift demand and it has appealed to the government to remove duty exemption on imported cement meant for government projects.

In the current financial year to 30 June 2014 the EAPCC plans to invest US$5.9m on plant and equipment upgrades. Overall the cement producer intends to spend up to US$32m until 2015 on building a new packing line, acquisition of new clinker and grinding capacity and the creation of a new line of pre-cast concrete products.

Kenya: The East African Portland Cement Company (EAPCC) has asked the Kenyan government to renew the term of its CEO, Kephar Tande, whose current three year term is set to end in October 2013. Tande's re-appointment presents a test to the new Kenyan government, elected in March 2013, which may follow its predecessors and attempt to influence the composition of the cement producer's management board.

"The board is satisfied with Tande's work and we have asked the Cabinet secretary to offer him another term," said the chairman of EAPCC, Mark ole Karbolo, in an interview with Kenyan newspaper Business Daily. He added that the EAPCC will announce a profit of nearly US$12m for the year ending June 2013.

In 2012 the government unsuccessfully attempted to oust eight EAPCC directors including the chief executive, accusing them of poor governance. The directors, including Karbolo, Kenya Airways CEO Titus Naikuni and lawyer Hamish Keith, moved to court to block the move following the state's directive to disband the cement maker's board. The court reinstated them in a legal battle that also saw former President Kibaki's appointment of Karbolo's replacement revoked.

Kenya: The East Africa Portland Cement Company (EAPCC) plans to expand after returning to profit during the six months ending 31 December 2012. The company said that it was boosted by cost reduction and improved cement sales. EAPCC, Kenya's third largest cement producer, said that it was optimistic of strong full-year results and was exploring expansion into Tanzania. The company already operates in Uganda and South Sudan.

"We are now discussing the financing of these (new) projects," EAPCC's managing director Kephar Tande told investors in Nairobi. The company plans to raise new capital through the Nairobi bourse, with the aim of increasing clinker production to 1.5Mt/yr by 2016 from 0.45Mt/yr at present. Tande also expects EAPCC to double its exports (as a proportion of total production) to 10% by 2014.

EAPCC made a pretax profit of US$4.3m during the six months ending 31 December 2012, compared with a pretax loss of US$2.82m during the same period of 2011. Tande said the business boosted profits by saving about US$9.7m through increased efficiency.

This news is in stark contrast to EAPCC's 2012, which was blighted by boardroom disagreements, strikes, sackings, protests and even a shooting at the plant.