Lafarge quizzed over its high Kenyan involvement

Lafarge quizzed over its  high Kenyan involvement
Published: 11 August 2006

Kenya’s Trade and Industry Minister Mukhisa Kituyi has said the government was uncomfortable with Lafarge’s dominance in the domestic cement  and that it wanted more competition. Lafarge currently owns 73 per cent of the market leader in Kenya, Bamburi Cement , and 15 percent of Athi River Mining. Through Bamburi, Lafarge also owns about 42 per cent of East African Portland Cement (EAPCC) .

At present, the government is the majority shareholder in EAPCC, holding a 25 per cent stake and another 27 per cent by proxy, through the state-owned National Social Security Fund.

Kenyan government officials apparently  met representatives of Lafarge on Thursday to discuss the firm’s stakes in the country’s booming cement sector, officials said.

Local analysts have suggested the best way out of the situation would be for both the government and Lafarge to sell their stakes to a strategic partner to create an independent competitor.

"The government shouldn’t be in the cement business, (on the other hand) Lafarge would also like to buy Portland, but that would create a near monopoly situation," economic analyst Robert Shaw said.

Bamburi has apparently been linked to the recent dismissal of EAPC chief executive (see earlier reports) reportedly citing that it was unhappy with EAPC’s aggressive expansion plans for south Sudan and Rwanda.