Displaying items by tag: Kenya
CBMI Construction wins two contracts with LafargeHolcim for grinding plants in Uganda and Kenya
14 December 2016Kenya/Uganda: CBMI Construction has signed two contracts with LafargeHolcim in Kampala for cement grinding plant projects in Uganda and Kenya. Bamburi Cement, LafargeHolcim’s subsidiary in Kenya, has ordered a 1Mt/yr grinding plant from CBMI. The plant will be located in Nairobi. Hima Cement, a joint venture LafargeHolcim is part of in Uganda, has ordered a 0.8Mt/yr grinding plant. It will be located in Tororo in the east of the country.
The scope of the projects covers clinker feeding to cement packing and shipping. These contracts will come into force after being signed, receiving of guarantees and CBMI’s receiving advance payments. Contract periods are 17.5 months after contracts coming into force to complete industrial tests, and 19 months to commissioning.
Attendees of the signing ceremony included the CEO of Bamburi Cement Bruno Pescheux, the CEO of Hima Cement Daniel Pettersson and the Regional Manager of CBMI Li Ming.
East African Portland Cement chief accused of sexual harassment
24 November 2016Kenya: Simon Peter Ole Nkeri, the chief executive officer of East African Portland Cement Company (EAPCC), has been accused of sexual harassment in a legal case by a manager at the company. Lucy Rimanto Molonket, the head of Sales and Marketing, alleges that Nkeri harassed her on 31 August 2016, according to the Business Daily newspaper. She then alleges that he texted her to apologise for his behaviour. Subsequently she says that she was transferred to a low profile job in September 2016. EAPCC chairman Bill Lay has defended Nkeri, saying that the company has transferred 11 of its managers to different positions following financial problems.
Savannah Cement release details on cement plant upgrade
18 November 2016Kenya: Savannah Cement has released further details on its plans to upgrade its Athi River grinding plant. It intends to increase the capacity at the site by 1.2Mt/yr to 2.4Mt/yr with the installation of a vertical roller mill. Additionally, new belt conveyors, a packing plant and dust filters will be added. It plans to have the upgrade commissioned by mid-2018, according to the Business Daily newspaper. It will be built from December 2016 to March 2018.
"We are hoping to issue the tender for the project in early 2017, possibly January or February. Being a second production line, construction work should take anything between 14 and 18 months, therefore we would have the plant up and running by mid-2018. Once we get the approvals we will immediately look to finalise the financing aspect of the project," said Savannah Cement managing director Ronald Ndegwa. The cement producer is adding production capacity to expand its range of cement, with a focus on its hydraulic road binder blend that is used in road construction.
East African Portland Cement to lay-off over 1000 workers
18 November 2016Kenya: East African Portland Cement (EAPC) plans to lay-off over 1000 workers as part of plans to improve its efficiency. The company’s board has described the organisation as ‘severely over staffed’ and unable to compete with its rivals, according to Citizen Digital. At present it has around 2000 personnel and studies suggest that it only needs 500 of these workers to remain competitive.
Chairman Bill Lay said that high staff costs have contributed to the government-owned company’s financial problems. The management team is developing a voluntary early retirement program that will reduce staff levels. The company intends to spend US$19.6m towards the downsizing programme.
East African Portland Cement brings in the auditors
15 November 2016Kenya: East African Portland Cement (EAPC) has hired Ernst & Young to conduct a forensic audit of its business following reports that the company is technically bankrupt and may have lost around US$7.1m worth of stock from its warehouses since 2014. Cement stock valued at US$4m went missing in Kenya and US$3.1m disappeared in Uganda, according to the Business Daily newspaper. Ernst & Young started work for the state-owned cement producer in early November 2016.
East African Portland Cement profit falls by 42% to US$41m
11 November 2016Kenya: East African Portland Cement’s (EAPCC) profit has fallen by 42% to US$41m in the first half of 2016 from US$70.7m in the same period of 2015. It has blamed the drop on a fall in the revaluation gain of its assets, according to the Daily Nation newspaper. Its revenue rose by 5.4% to US$87m but this was adversely affected by rising cost of sales. The cement producer asked for regulatory approval to publish its financial results after a 31 October 2016 deadline.
ARM Cement secures US$140m from CDC Group
07 October 2016Kenya: ARM Cement has completed an equity deal to secure US$140m in funding from CDC Group. The investment is believed to be the largest equity deal in Kenya and East Africa in 2016, and one of the largest equity deals in Kenya to date. The cement producer intends to use the investment to build a new cement plant in Kitui County.
“This deal is indicative of the increased infrastructure development in the East African region. The demand for quality and sustainably produced cement has never been higher, and this deal capacitates ARM to meet this demand head-on. The deal is good news as it is expected to create jobs due to increased production and opportunities all along the supply chain,” said Paras Shah, a partner with Bowmans Kenya, the firm that advised ARM on the legal aspects of the transaction.
ARM Cement appoints three new board members
28 September 2016Kenya: ARM Cement has appointed John Ngumi, Pepe Meijer and Ketso Gordhan as non-executive directors of the company. They replace Atul Mathur, Michael Turner and Daniel Ndonye, who have resigned as directors following an extraordinary general meeting of shareholders held on 26 August 2016.
John Ngumi holds a BA degree in Philosophy, Politics and Economics from the University of Oxford, UK. He started his banking career at National Westminster Bank, London and has since worked variously for Grindlays Bank, Barclays Bank, Citibank and CfC Stanbic Bank/Standard Bank of South Africa. In between he also co-founded one of Africa's first indigenous investment banking groups, Loita Capital Partners. Ngumi left CfC Stanbic Bank in 2015 upon his appointment by President Uhuru Kenyatta as non executive chair of the Board of Directors, Kenya Pipeline Company Limited.
Pepe Meijer is a Commonwealth Development Corporation (CDC) Advisor and former Managing director for PPC International up-to November 2015. During his PPC tenure Meijer also held various Executive, General, Senior and Middle management positions across PPC’s cement operations that spanned over 28 years. Prior to joining PPC, he worked in the gold mining industry as section engineer and in the fishing/processing /frozen-food industry as group projects manager.
Ketso Gordhan joined CDC in April 2016 as the Head of Africa. He previously spent several years as Chief Executive Officer of PPC Cement, South Africa’s largest cement company. At PPC, Gordhan led the expansion of the company into sub-Saharan Africa, helping build the footprint outside South Africa into Democratic Republic of the Congo, Rwanda, Ethiopia and Zimbabwe. Before PPC, Gordhan spent almost 10 years leading RMB’s private equity business. He has also held a number of public sector roles, including City Manager of Johannesburg and Director General of the Ministry of Transport, where he led major infrastructure projects, such as the South Africa’s N4 Toll Road.
Update on Kenya
14 September 2016Tensions have boiled over regarding imports of cement to Kenya in recent weeks as different importers have received opprobrium in the local press. Last week Dangote Cement was attacked for importing cheap cement into the country from Ethiopia, allegedly off the back of a cheap electricity deal. This week, Chinese imports have been in the firing line, following data reportedly seen by the Business Daily newspaper that showed that the value of Chinese cement imports rose tenfold year-on-year in the first half of 2016.
At the heart of these rows lies a strong demand for cement: Kenya had a cement production utilisation rate of 90% in 2015 according to Kenya National Bureau of Statistics (KNBS) data. It produced 6.35Mt in that year and used 5.71Mt for consumption and stocks. Its utilisation rate has been rising steadily since 2012. It was 93% for the first six months of 2016.
Unfortunately for the local producers this kind of demand attracts competition from within and without. Nigeria’s Dangote Cement is planning to build a 3Mt/yr plant at Kitui and Cemtech Kenya, a subsidiary of India’s Sanghi Group, is planning to build a 1.2Mt/yr plant at Pakot.
Local producer ARM Cement reported both falling turnover and a loss for the first half of 2016. It blamed this on increased competition in Tanzania. However, in 2015 it increased its turnover in Kenya by importing clinker over the border from its new Tanga plant in Tanzania. It also noted a ‘competitive landscape’ in Kenya and lamented the effects of currency devaluation on its financies as a whole. East African Portland Cement had a tougher time of it for its half-year that ended on 31 December 2015, issuing a profit warning of a loss and expected reduced profits despite a rise of 12% in sales revenue. By contrast, Bamburi Cement, LafargeHolcim’s subsidiary, reported both increases in revenue and operating profit in 2015. Although it too noted problems with interest rates and currency depreciation in the country during this period.
The focus on Chinese imports follows Chinese contractors winning some of the biggest infrastructure projects in the country. The China Rail & Bridge Corporation (CRBC), for example, is building a railway between Mombasa and Nairobi. The Business Daily newspaper has found data showing that Chinese cement imports worth US$19.8m to Kenya in the first half of 2016 compared to US$1.99m in the same period of 2015. The background to this is that China has more than doubled the value of all of its imports to Kenya since 2011 according to the KNBS. Total import volumes of clinker from all foreign countries increased by 51% in 2015 from 1.31Mt in 2014, the largest increase in at least five years.
If local cement producers are being locked out of supplying these kind of deals no wonder they are getting angry. However, another angle on what’s happening here might be that local producers who are suffering from increased competition, falling prices and a precarious national financial situation are lashing out at the easiest target. The local press doesn’t appear to have criticised ARM Cement for moving its Tanzanian clinker north of the border for example. Likewise, a Bamburi Cement spokesperson previously said that the producer had supplied 300,000t of cement to the rail project since September 2014, earning it nearly US$10m. Kenya needs cement as it builds its infrastructure. Fortunes will be made and tempers will be lost as it does so.
China exports US$19.8m worth of cement to Kenya in first half of 2016
12 September 2016Kenya: China exported cement worth US$19.8m to Kenya in the first half of 2016 compared to US$1.99m in the same period of 2015, according to data from the Kenya National Bureau of Statistics (KNBS). Despite this large increase in imports of cement, Chinese contractors working in the country, such as the China Road and Bridges Corporation which are currently building the Mombasa-Nairobi railway, have denied bringing the material into Kenya. They say they have only imported machinery and equipment for the large-scale infrastructure projects that they are working on, according to Business Daily.