Kenya: Lafarge under competition probe

Kenya: Lafarge under competition probe
16 May 2014

Kenya’s antitrust authority may force Lafarge SA to sell some of its domestic interests if the cement maker is found to be flouting domestic competition rules, according to Bloomberg reports.

The Competition Authority of Kenya is probing Lafarge’s influence on Kenya’s cement industry through its 59 per cent stake in Bamburi Cement Co and 42 per cent shareholding in East Africa Portland Cement Co (EAPCC). The findings will be published next month, Director-General Francis Kariuki said in an interview.

“The current arrangement between Lafarge and EAPCC from the face value of it may be deemed to be an unwarranted concentration of economic power because of the close directorship Lafarge is having in EAPCC and Bamburi,” he said.

The authority is investigating pricing in the Kenyan cement industry amid a dispute between shareholders and the government over ownership of EAPCC. Kenya’s Treasury holds a 25 per cent stake in the company, while the state-owned National Social Security Fund has 27 per cent.

The government wants Lafarge to dilute its shareholding in EAPCC because no company should hold a “monopolistic stake” in Kenyan Industries, Industrialisation and Enterprise Development Permanent Secretary Wilson Songa said earlier this year.

Published under Cement News