Displaying items by tag: East African Portland Cement Company
East African Portland Cement launches sustainable cement product
11 November 2022Kenya: East African Portland Cement (EAPCC) has launched a sustainable cement product called Green Triangle Cement. Trade and Investments Cabinet Secretary Moses Kuria attended the official launch for the product, according to the Business daily newspaper. The product is a new masonry cement suited for mortar works. It is produced using less clinker. It is certified under the 22.5 standard via the Kenya Bureau of Standards but the company says it has been ‘boosted’ to 28 strength for a wider range of applications. The EAPCC is currently aiming to increase its range of cements to five brands.
Update on Kenya, September 2022
28 September 2022Nigerian billionaire Aliko Dangote was spotted attending the inauguration ceremony of Kenyan President William Ruto earlier in September 2022. This is relevant because Dangote’s cement company previously announced plans in 2016 to build two 1.5Mt/yr plants in Kenya, near Nairobi and Mombasa respectively. They were intended to become operational by 2021. Unfortunately, Dangote himself allegedly described Kenya as being more corrupt than Nigeria to Kenyan broadcast journalist Jeff Koinange a few years later and nothing more happened. Back in 2014 Ruto visited Dangote Cement’s Obajana plant in Kogi state in Nigeria when the politician was the Deputy President of Kenya. Dangote’s attendance at the presidential inauguration this month suggests at the very least that his relationship with Ruto remains active. Maybe more news on those planned plants will follow.
Graph 1: Cement in Kenya, 2018 – June 2022. Source: Kenya National Bureau of Statistics (KNBS).
The reason why the owner of Africa’s largest cement company might be interested in the Kenyan market can be seen in its latest cement production figures. Data from the Kenya National Bureau of Statistics (KNBS) shows that production for the first half of 2022 grew by 20% year-on-year to 4.95Mt in the first half of 2022, from 4.12Mt in the same period in 2021. Cement production was broadly similar in 2018 and 2019 at around 6Mt. It then increased by 25% to 9.25Mt in 2021 from 7.41Mt in 2020. On a rolling annual basis, production picked up at the start of 2020 and has risen consistently since then each month, peaking at over 10Mt in May 2022.
However, the elections in August 2022 probably slowed this growth trend, despite being much more peaceful than those in 2007, although the KNBS is yet to release the data. Bamburi Cement said in its outlook for the second half of 2022 that it expected markets to recover after the ballot. The subsidiary of Holcim reported increasing turnover in the first half of 2022, due to mounting sales volumes and price rises, but its profit fell sharply. It blamed this on fuel and logistics inflation, growing clinker import costs as well as negative currency exchange effects.
That last point about imported clinker is worth noting given that a government report in late 2021 found that the country had a clinker shortage of up to 3.3Mt/yr. Yet, the KNBS data in recent years shows that cement production and consumption are broadly similar, suggesting that the shortfall in clinker is being imported. The report added that 59% of the imported clinker originated from Egypt, tariff free, due to a free trade agreement. Local producers were reported to have been operating at a 65% capacity utilisation rate. Egypt and the UAE accounted for most of the imported clinker followed by Saudi Arabia. An interview in the Standard newspaper at this time with Bamburi Cement’s managing director Seddiq Hassani revealed that, despite locally produced clinker being cheaper than imported clinker, some producers were reluctant to hand control of a key input material over to their local competitors. Other producers, predictably, were trying to persuade the government to raise the duty on imports of clinker from 10% to 25%. Tariff discussions have continued in 2022.
So far in 2022 the other big stories in the sector have included Bamburi Cement’s plans to build two solar power plants and a major repair to the kiln shell at East Africa Portland Cement’s (EAPCC) Athi River cement plant. The solar plants will be built next to Bamburi Cement’s integrated Mombasa plant and its Nairobi grinding plant. Once operational in 2023 they are anticipated to supply up to 40% of the cement producer’s total power supply. Devki Group, the owner of National Cement, also announced plans in August 2022 to set up a wind farm near Mombasa. However, this seems more like an attempt to diversify the group into electricity production rather than to supply its own plant near Nairobi. EAPCC’s upgrade project has completed this week after about a month and half of work. It is intended to increase the plant’s cement production by 50%.
Cement production started in rise in 2020 but the Covid-19 pandemic may have constrained this. Production (and consumption) then jumped up in 2021 and looks set to do similar in 2022 bar a possible blip from the elections in August 2022. This is despite the global market issues arising from the end of Covid-19 and the war in Ukraine. These may be uncertain times but the fundamentals for the Kenyan cement market look positive despite rising end prices. Unsurprisingly, it looks likely that Dangote Cement remains keen to extend its business to Kenya.
East African Portland Cement restarts repaired kiln at Athi River plant
23 September 2022Kenya: East African Portland Cement Company has resumed production at its 0.6Mt/yr Athi River cement plant. The producer successfully replaced the shell of the plant’s kiln. Managing director Oliver Kirubai said that the upgrade will enable the plant to increase its cement production by 50%, and reduce the price of its Blue Triangle brand cement.
Kenya: East Africa Portland Cement began work to replace a 16.5m-length of kiln shell at its Athi River cement plant at the end of July 2022. The producer says that the project will increase the kiln line’s capacity by 1400t/day.
Managing director Oliver Kirubai said "Due to the high costs of energy and an old clinker line, the board has prioritised efficiency and reliability of our integrated plant operations to drive cost optimisation.”
Kenya: Cement companies are in the process of expanding their total clinker production capacity by 70% to 10.7Mt/yr by 2023 from 6.3Mt/yr. The Business Daily newspaper has reported that six producers – Bamburi Cement, East African Portland Cement Company (EAPCC), Karsan Ramji & Sons, National Cement, Rai Cement and Savannah Cement – will add a total of 4.4Mt/yr to their clinker capacities.
Global Cement News previously reported that Kenya faced a 3.3Mt/yr national clinker shortage on 13 October 2021. Domestic producers are in the process of lobbying the government to raise the duty on imports of clinker to 25% from 10%.
Kenya: East African Portland Cement (EAPCC) has appointed Daniel Kiprono as its acting managing director. He succeeds Stephen Nthei, who was appointed to the temporary post in mid-2019. No reason for his departure has been disclosed. Nthei replaced Simon Peter Ole Nkeri, who was reportedly relieved of the role, in mid-2019. Kiprono has worked at EAPCC for over 20 years in a variety of roles.
East African Portland Cement managers avoid jail over unpaid workers
03 February 2021Kenya: The Court of Appeal has stopped directors and accounting officers at the East African Portland Cement (EAPCC) from being sent to jail due to the company’s failure to pay contract workers about US$12m as agreed in a collective bargaining agreement. The judges noted that the cement producer had already paid US$0.8m as a gesture of goodwill, according to the Business Daily newspaper. Members of the Kenya Chemical & Allied Workers union brought the legal case against the EAPCC accusing it of paying them less than permanent staff.
Jacob Omondi Guma reinstated as production manager at East African Portland Cement Company
09 December 2020Kenya: A court in Nairobi has reinstated Jacob Omondi Guma as a production manager for the East African Portland Cement Company (EAPCC). It follows the company’s decision to appoint Japheth Ombogo to the position, according to the Business Daily newspaper. The judge annulled the company’s decision on the grounds that it was marked by irregularities and may have been ‘malicious.’ The court ruled that Guma may stay in post until his three-year contract ends in September 2022 unless otherwise lawfully terminated. He was removed from the role in November 2019 after serving for just two months. The cement producer denies the allegations and says it removed him from the post due a lack of qualifications.
East African Portland Cement Company alleges illegal mining by China Road and Bridges Corporation
30 November 2020Kenya: East African Portland Cement Company (EAPCC) has threatened “recovery proceedings” in relation to the alleged unlawful extraction of building materials on the producer’s land in Mavoko County by China Road and Bridges Corporation (CRBC). EAPCC says that it has twice contacted the construction company, which is engaged in building the Nairobi Expressway toll road, to order it to desist, according to the Business Daily newspaper.
Acting managing director Stephen Nthei said, “The company cannot violate the country’s laws when constructing a commercial road. Any mining activities will devalue our land when we are eyeing prospective buyers. We might be forced to institute recovery proceedings against this company.”
The cement producer is seeking a buyer for the parcels of land, which are also home to illegal squatters.
Kenya: A union representing 150 of East Africa Portland Cement Company’s remaining 270 employees, who it made redundant on 1 September 2020, has rejected the company’s offer to take back the workers on a three-year contract with a pay cut of 50%. The rehiring was to be the third phase in the producer’s programme to cut down its 936-strong workforce, according to the Business Daily newspaper.
Acting managing director Stephen Nthei said, “We ran into teething issues between ourselves and the union. There were a few unionisable staff who did not sign, and that is what we are still discussing and agreeing.” He added, “Whatever we will discuss and agree between ourselves and the union will apply to everybody, even those who have signed. It should not be a discriminative procedure.”