East African Portland battle

East African Portland battle
Published: 04 March 2004

Nairobi: a local cement distribution battle is beginning to have more far-reaching consequences for both government and the plant’s owners according to local news reports.
The matter came to a head only last week when the Parliamentary Accounts Committee chairman, Mr Omingo Magara, and a member Mr Otieno Kajwang’, issued a statement accusing Trade and Industry minister Dr Mukhisa Kituyi of impropriety. It is not clear how the Parliamentary Accounts Committee (not Parliamentary Investment Committee which deals with parastatals) got into the picture.

The favourable distribution contracts offered to local players Donholm Rahisi Stores and MK Roble have already been subject of much controversy since 1999. The apparently lopsided contract has at the same time aggrieved industry players, especially Bamburi Portland. Only recently, it announced a 16 per cent decline in pre-tax profitability and swiftly pointed the finger at Portland’s excessive discounting policy.

Bamburi with an installed capacity of 3.3Mt but apparently only now producing only 2Mt for both export and domestic consumption, is understandably price sensitive. Ironically, Bamburi and its parent Lafarge also hold a sizeable stake at East Africa Portland. Bamburi in addition holds nearly 20 per cent in the other cement manufacturer, Athi River, attracting accusations of running a monopoly by practically sitting on boards of all cement companies in the country.