Displaying items by tag: Kenya

Kenya: The activism of local Massai groups and environmental NGOs is preventing the National Cement Company from installing its clinker plant south of Nairobi.

Narendra Raval, head of the National Cement Company Ltd (NCC), known as 'Guru', is facing stiff resistance to installing a clinker plant south of Nairobi and operating limestone quarries. His company has acquired land from the local county council to build its second cement plant in the country, but environmental NGOs are opposed to this project. Massai groups are doing likewise, saying in their case, that the land belongs to them. The strongest resistance comes from state-owned Kenya Wildlife Services (KWS), which argues that the land should remain a migration corridor for wildlife between the national parks of Amboseli and Nairobi.

A subsidiary of the Devki Group (which is also the parent of DevkiSteel Mills), NCC argues its case by promising to reserve 200 new jobs for Massai youth.

Kenya: Attempts by the suspended East African Portland Cement Company (EAPCC) managing director, Kephar Tande, to serve the management with court orders re-instating him ended in chaos yesterday when more than 1000 workers blocked him and his police escort as he attempted to leave the plant. One of the protesting workers was shot in the arm by a security officer at the plant who had wrestled a rifle from a nearby police officer. Following this the staff set fire to two vehicles and completely sealed the entries to the company premises.

Riot police used tear gas as workers shouted that they would only allow the police to escort Tande 'over their dead bodies.' The injured employee was given first aid at the company hospital and was later transferred to Mater Hospital in Nairobi.

Youth Affairs Assistant Minister Wavinya Ndeti had earlier addressed the staff at the site and appealed to them to return to work. Ndeti told the workers that she had attended a meeting with the prime minister, Raila Odinga, and three senior ministers on 15 January 2012, which had resolved that the entire board of EAPCC should be fired. "The Prime Minister was in agreement with us that the entire board of directors will have to go home," she said. "From next week you will be hearing good news of new board members," she said.

On 17 January 2012 Kenya's Capital Market Authority (CMA) imposed a 60-day trading ban on the already suspended shares of EAPCC to protect investors from the dispute.

Kenya: Court papers have started to reveal why the Kenyan government may have dismissed the directors of the East African Portland Cement Company (EAPCC) on 22 December 2011. The papers allege that the board spent US$11m on goods without following competitive bidding and in another instance overruled the tender committee to vary the terms of a clinker contract.

"Those purchases were made by direct procurement or restricted tendering," an affidavit by acting Industrialisation Minister Amason Kingi said. "These processes were not authorised by the Public Procurement Oversight Authority."

According to the affidavit, the irregular purchases were made between 15 August 2011 and 30 November 2011. Mr Kingi said that the Kenya National Audit Office had raised a query over the expenditure of US$140,000 that was overpaid to the chairman, Mark ole Karbolo, and the suspended directors.

The affidavit also said that the board changed the terms of a contract to supply 140,000t of clinker after the supplier, Sanghi Industrial, requested to increase the price after supplying only 67,000t. After the company's tender committee rejected the increase, the board granted the variation which ended up costing the company US$850,000.

"The suspended board overruled the tender committee and awarded a price increase for the delivered products as well as for further products to be delivered," said Kingi. The government said that it could not reveal more without jeopardising a forensic audit currently under way.

The ousted directors have previously blamed their removal from office on a multi-million dollar tender that the government wanted swayed in favour of a local supplier. They said that the award of the kiln upgrade contract to South Korean firm, Posco Plantec, in late November 2011 had upset government officials who wanted the tender given to construction firm H Young for US$43m.

EAPCC's directors settled on Posco Plantec on the strength of its financial bid of US$21m. H Young, however, had a superior technical bid. Karbolo and three other directors, Titus Naikuni, Hamish Keith and chief executive Kephar Tande, are seeking to reverse the minister's decision, arguing that EAPCC is not a state-controlled company.

Kenya: East Africa Portland Cement Company (EAPCC) has severed a clinker supply contract, thought to be worth hundreds of thousands of US dollars, with Bamburi, its anchor shareholder. The decision marks the end of a four-year deal that had raised questions over potential conflicts of interest due to common shareholding and market rivalry of the two listed firms. Although EAPCC is a listed firm, it is considered a state corporation, with the majority of its shares held by the government. This makes it difficult to import its own clinker due to stringent Public Procurement Oversight Authority's rules.

The cement maker has now signed a new deal for supply of clinker with rival National Cement, which will see EAPCC save about US$3.10/t. EAPCC's managing director, Kephar Tande, said, "We found out that other players were offering lower prices, which means we could leverage on lower clinker costs to improve our profitability."

EAPCC's decision to single source the supply of clinker from Bamburi alone raised eyebrows when it was signed in 2007. Bamburi, through its parent company Lafarge, controls 41.7% of EAPCC. Lafarge also holds a 73% interest in Bamburi Cement and until 2009 held a 15% stake in the country's other cement maker, Athi River Mining. Cross ownership of the three cement companies has in the past led to accusations of unfair business practices, including collusion over price setting.

National Cement MD, Raval Narendra, said that EAPCC was now its biggest client. "We are the biggest clinker importers in the region now because we have established contacts in Europe and the Emirates. We signed a supply contract with EAPCC for 0.15Mt for 2011," he said.

Kenya: Investors behind the US$148m plant in the Pokot region of Kenya have pledged to go ahead with construction, which has failed to take off 14 months after the ground-breaking ceremony. Directors have blamed the delay on various studies required before the investment.

“The Chinese contractors will be on the site soon,” said project director Rajeshkumar Rawal. “A general manager is already on the ground.” He rebuked industry talk that Indian plant builders Sanghi Cement had approached a local cement industry player insisting that local investors still held 26% of the stake with the Indian group taking the balance. Mr Rawal, a shareholder in the project, was in the thick of the battle to secure rights and licences for the project but he could not give a specific time frame promising more details in late August 2011 when Sanghi chiefs visit Kenya.

Some industry players have doubted the viability of setting up a factory in the remote area with poor infrastructure despite its proximity to the South Sudan which has strong potential for cement consumption.