Kenya: EAPCC says performance rating unfair

Kenya: EAPCC says performance rating unfair
Published: 20 June 2011

Kenya’s East African Portland Cement Company (EAPCC) has disputed the 2009/2010 Government performance contracting results that ranked it as the third worst performer. The cement manufacturer said the ranking dents its reputation.

In a statement, the company attributes its poor rankings to a huge restructuring programme that it undertook during the period under review. It also suffered from high production costs brought due to a spike in oil prices.

"The restructuring was a one-off event. Costs will not rise to such as scale in the future," said Kephar Tande, the EAPCC Managing Director.

The company undertook an intense restructuring programme that involved the retirement of a large number of staff, all at a cost of KES300m (US$3.3m). Further, rising energy costs for power, oil and certain raw materials pushed the firm’s cost of production up approximately KES1.8m.

"The company has already addressed these issues and resolved them," said Tande.

The firm insisted the restructuring process was a one-off measure, while cost of production has also been brought under control. The firm has phased out furnace oil, which was its key raw material, and replaced with coal.

"The company is also upgrading of its clinker production line to reduce clinker imports," said Tande.

The firm has also effected a change in its management, including appointing a new managing director, to spruce up its performance, but it still disputes the ranking method used.

"The performance contracting scoring system does not take into account the phenomenon of one-offs such as EAPCC has suffered. It is both unrealistic and unfair to call this company a poor performer on the basis of an extraordinary item," Tande said.