EAPC alarmed by high oil prices

EAPC alarmed by high oil prices
Published: 12 August 2005

East Africa Portland Cement Company plans scale down its reliance on oil fuel. The decision has been fuelled by instability in oil prices. Ndegwa Kagio, General Manager Works, said the firm was exploring ways of using coal as an alternative source of fuel in its production process. "The energy cost has been the biggest contributor to our cost of production and an impediment to our regional competitiveness," he said.

Kagio was speaking during a tour by a team of business executives from Zimbabwe at the East Africa Portland factory in Athi River, Machakos District. The group led by Godfrey Dzinomwa, the Managing Director of Hwange Colliery Company Limited, a Zimbabwean company with interest in coal, was exploring possibilities of selling coal to East Africa Cement Company.

Kagio said though the company had earlier contemplated switching to coal-based production without much headway, pressure of fuel cost on expenditure might force the company to pursue the coal alternative with more vigour. He said the company would engage the Zimbabwean team in further talks with the possibilities of importing coal. "The issue is really logistics. If we get the logistics and the cost right, then we will definitely take the coal route," he said.

Kagio said use of coal would also entail investment in changing some of the existing machines. Obiri Luke, East Africa Portland Cement Procurement Manager, said the company was currently spending close to Sh58 million per week on oil fuel alone. He said if the current surge in oil prices continues, the construction sector might find going rough, as the cost of cement would definitely rise.