A move by the National Social Security Fund to divest from East African Portland Cement Co (EAPCC) will reduce the red tape associated with State firms, the cement producer has said.
East African Portland Cement chairman Mark ole Karbolo last week said decision-making and procurement procedures would now be eased with the absence of government bureaucracy. He said this would enable the company to respond robustly to market changes.
"This is good news to Portland investors because the requirements of the State Corporations Act were not conducive to our kind of business," he said.
"We had to tender in a certain way and consult the ministry and other government agencies, leading to delayed decision-making," said the chairman.
NSSF reduced its shareholding in the cement maker from 27 per cent to 23 per cent after it transferred 3.6 million shares worth Sh200 million to its workers’ retirement benefits scheme, a private entity.
Government shares have now fallen below the 51 per cent threshold required for a firm to be a State corporation.
Mr Karbolo said the firm would expedite procurement processes in order to compete with other private cement manufacturers.
"We don’t have to refer to the Ministry of Industrialisation because the board of directors and shareholders will now be the top decision-making organ of the company," said Mr Karbolo.
The board and the management now have a free hand in running the company within the provisions of the Companies Act.
Mr Karbolo asked the Capital Markets Authority to compel other major shareholders to offload their stake to enable the company to have at least 25 per cent of its shares freely trading.