EAPCC likely to resume operations Thursday

January 18, 2012
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, NAIROBI, Kenya, Jan 18 – Operations at the East African Portland Cement Company (EAPCC) are likely to resume on Thursday after the parties involved in the dispute ironed out their differences.

EAPCC Chairman Mark ole Karbolo disclosed that ‘a solution has been found’ and that the board was meeting all stakeholders to agree on a return-to-work formula.

“It is the intention of the board that the company resumes operations immediately. The underlying issues that were raised will be addressed following the right procedure and also using the board processes,” he remarked.

The cement producer shut down on Friday last week when its staff blocked the Managing Director Kephar Tande and board members who had just been reinstated by the court from accessing the premises.

The workers were demanding that a new board be constituted before they can agree to go back to work citing their lack of confidence in the team.

The near month-long dispute has morphed from being about the control of the company to political interference and at some time also took an ethnic turning that sucked in politicians.

The fights were taken to the courts, a fact that also complicated matters for the government which was barred from interfering with the affairs of the board despite directly holding a 25.3 percent stake.

The row thus meant that for five days nothing was taking place at the Athi River-based factory which produces between 3,000 and 3,500 tonnes of cement per day.

Consequently, a loss of about Sh300 million has been incurred and hundreds of man-hours lost.

It is possibly this loss coupled with the slapping of a trading ban of the EAPCC shares on the Nairobi Securities Exchange (NSE) that jolted the government to action.

A source has told Capital Business that members of the board met senior government officials on Tuesday to try and address the outstanding concerns, a move that seemed to have worked because a day later, the board was engaging other stakeholders including politicians and workers.

“We have begun by calling all the managers and then we will meet the staff to agree on how to get back to work. We will then move to the next level of stakeholders because it is important for this company to continue to serve the people and also ensure that the livelihoods of the people who depend on it are safeguarded,” the embattled chairman revealed.

Despite the millions of shillings in losses, Karbolo exuded confidence that the firm would be able to recoup its losses in coming days.

“It is possible. We will maximise our operations and our efficiencies and we should be able to recover,” he emphasised.

But even as the operations return to normal in the coming days, the concerns that have been brought to the fore by the infightings surrounding the shareholding structure, will have to be addressed.

In the last couple of days, it has been unclear whether the 27 percent stake held by the National Social Security Fund (NSSF) should be treated as belonging to the government or if it should be considered as a separate entity.

While the board members have held that both the government and the NSSF, which are among the main owners together with French conglomerate, Lafarge with a 41.7 percent stake should be looked at as different shareholders, Industrialisation Permanent Secretary Karanja Kibicho maintained that the two are one entity.

“As far as the government is concerned, its shareholding at EAPCC remains just like it was 10 years ago. Our shareholding in that firm is 52.3 percent,” Kibicho maintained.

The public holds the remaining six percent through the NSE.

It will be interesting to see which direction this debate takes in coming days. This is because even though the board insists that the company is not a parastatal, it engages with the government is as if the cement producer was a state agency.

The directors for example drive government cars; they receive directives through circulars and other communications from the office of the Head of Public Service and most of all, the government through Treasury guaranteed it a yen-denominated loan of Sh3.6b loan that was taken in 1996.

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