EAPCC woes threaten cement production

January 16, 2012
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, ATHI RIVER, Kenya, Jan 16 – A cement shortage looms if the standoff between the board of directors and the staff at the East African Portland Cement Company (EAPCC) continues, embattled Managing Director Kephar Tande has said.

Tande warned that the row over who should run the company is not sustainable, and has so far led to a loss of Sh200 million that has been incurred in the last three days.

“Sh200 million has gone down the drain and is still going down the drain. It (the company) cannot sustain this kind of losses and it needs to be re-opened immediately,” he declared.

The cement manufacturer’s operations have been shut since Friday last week when the court reinstated the MD and board of directors who had been suspended by the acting Industrialisation Minister Amason Kingi under whose docket the company falls.

However EAPCC workers, who have sided with the minister, have vowed not to resume duty until a new board is constituted.

“There are other losses that cannot be quantified such as the man hours lost,” Tande said.

Further, it is estimated that the company will need fuel amounting to Sh8 million to re-start the kiln that was shut down on Friday.

EAPCC is the second largest cement producer in the country after Bamburi with a market share of 33 percent.

Some 3,000 to 3,500 tonnes of cement are produced at the factory each day but this capacity has now been jeopardised by the ongoing battles that have morphed from boardroom wrangles to political intrigues.

The troubles came to the limelight on December 22 last year when the board immediately moved to court to challenge the minister’s decision to suspend them saying he did not have the powers to do so.

The board argued that the cement producer is not a state parastatal and as such the government does not have authority to hire or fire any director at the firm.

Previously, the company had always been treated as such since it was assumed that the combined stake of government at 25.3 percent stake and the 27 percent held by the National Social Security Funds (NSSF) – which has been viewed as a state agency – gave the authorities a controlling stake.

French conglomerate, Lafarge holds a 41.7 percent stake while the remainder is held by the public through the Nairobi Securities Exchange (NSE).

However, Attorney General Githu Muigai threw a spanner in the works when, in giving his interpretation of the law, reinforced the directors’ view that EAPCC is not a state parastatal.

The saga has however now moved from revolving around the shareholding structure to claims of corruption and political interference.

In an interview with the media on Monday, Tande alleged that his tribulations stem from a section of politically connected people who want to kick him out of the position so that they can appoint a manager and a board that can facilitate them to pilfer from the company.

In his defence, he wondered how the workers could accuse him of corruption when he had helped turned around the company from an institution that made a loss of Sh270 million in 2009 to one that returned a Sh550 million profit a year later.

In addition, he had worked out a plan that saw all the people who were engaged on casual terms employed on a contractual basis in July last year.

“The accusations that EAPCC is a poor performer now are lies. When I became the MD, I increased the profits seven fold and I was about to accelerate that performance but that of course did not please a lot of people,” he said.

“By sealing all the loopholes where people have been pushing that is when they stopped us,” he added hinting to the political interference theory.

Despite the problems bedevilling it however, he was optimistic that the firm’s outlook this year remains bright.

Tande was due to report back to work on Friday last week but he could not as he feared for his safety from the workers opposed to him, accusing him and the chairman Mark ole Karbolo of wrongdoing and plotting to retrench some of them.

“This is one of the lies that are been peddled by those who are opposed to my coming back there as a strategy to excite staff against me,” the besieged MD complained.

He however felt that the workers were being incited to cause mayhem. While vehemently denying that he had sent about 100 Administration Police officers to keep vigil at the headquarters in Athi River, he expressed his willingness to meet with his staff in order to iron out the issues.

The drama and intrigues looked set to continue for some time as the government, through the ministry has been barred by the courts from interfering with the running of the company.

Industrialisation Permanent Secretary Karanja Kibicho argued that their hands were tied and as such could not appoint another board to take over.

“We are leaving this matter to the conscience of the MD and the chairman. They should do the honourable thing and do what is good for the company,” the PS told Capital Business.

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