Energy costs too high, says Bamburi CEO

Energy costs too high, says Bamburi CEO
Published: 26 October 2004

Bamburi Cement managing director, Didier Tresarrieu, said yesterday that for local industries to compete effectively with imports from the Comesa, energy costs need to come down.  Mr Tresarrieu said exorbitant electricity costs had made it difficult for local manufacturers to cope with imports from the region a development he said did not augur well for the sector.  "The Government should look into ways of reducing electricity costs in the country, not only to create a level playing field, but also to make local products competitive both in Comesa and the global markets," said Mr Tresarrieu during celebrations to mark 50 years of Bamburi Cement’s existence.

"Considering that the cement production is fuel intensive, with energy costs amounting to between 40 to 45 per cent of total production cost, it is easy to see why cheap cement imports from either China or Egypt have a pricing head start over local cement," he observed.  Local companies operating in Mombasa have paid an average of 7.43 US cents per kilowatt-hour since 2002, while those in Nairobi paid 6.6 US Cents. These figures compare very poorly with what companies obtain [experience] in other countries, especially South Africa and Egypt, he said. Mr Awori also called on the company to look into ways of using other sources of fuel other than fuel and electricity.