Kenya: EAPCC reverts to Bamburi for clinker supply

Kenya: EAPCC reverts to Bamburi for clinker supply
31 December 2012

East Africa Portland Cement Company (EAPCC) has turned to its shareholder, Bamburi Cement, to supply clinker a year after it severed a four-year supply deal with the firm and inked a contract with National Cement.

EAPCC fell out with National Cement for breach of contract linked to non-payment and making orders of clinker that were below the agreed quantity threshold, according to reports in the Business Daily of Kenya.

“I’m not supplying them because they are not paying,” said Mr Narendra Raval, the managing director of National Cement in an interview with the Kenyan newspaper. “The contract stipulated EAPCC purchase the clinker in quantities of shiploads, equivalent to 30,000 tonnes. However, they were making orders in bits of 5,000 or 10,000 tonnes and delaying to make payments.”

Information on the Bamburi deal is contained in EAPCC’s annual report, which shows it paid its rival KES134.1m in the year to June.

Last year, EAPCC said it turned to National Cement because it was saving KES270 per tonne of clinker, arguing that Bamburi’s prices were higher than the market average.

The government controls more than half of EAPCC’s stake, 25 per cent directly and 27.5 per cent through the National Social Security Fund.

National Cement imports its clinker from Asia but has announced plans to build a clinker plant in Kajiado at a cost of KES10bn, to be funded through a syndicated loan from the KCB and the Standard Chartered Bank.

“We import clinker from China, India and Indonesia and because we buy in large quantities, we get good prices of about $2-3 off the price,” said Mr Narendra. “I also supply to ARM, Bamburi and the regional market — Rwanda, Uganda.”

EAPCC also plans to set up a clinker plant in Kitui next year after it acquires a limestone deposit.

Published under Cement News