East African Portland Cement Company

East African Portland Cement Company
Public
KN: PORT
Industry Construction
Founded 1933
Founder Blue Circle Industries
Headquarters Athi River, Kenya
Key people
 Bill Lay
Chairman of the Board
Simon Peter Ole Nkeri
Managing Director
Prof Sarone Ole Sena
Director
Products Cement
Revenue Increase KES: 9.21 billion (2012/13)
Increase KES: 2.49 billion (2012/13)
Total assets Increase KES: 16.13 billion (2012/13)
Total equity Increase KES: 7.1 billion (2012/13) [1]
Website Homepage

East African Portland Cement Company commonly known by its abbreviation EAPCC, is a Kenyan based construction company specializing in the manufacturing and selling of cement and cement related products.[2][3]

Overview

EAPCC's headquarters are located in Athi River, a small town about 30 km from Nairobi, Kenya's capital city. The company has operations in Kenya and Uganda.

History

East African Portland Cement Company started as a trading company importing cement mainly from England for early construction work in British East Africa (now Kenya) as an agent of Blue Circle Industries of the United Kingdom.[4] The name Portland was given due to the resemblance in colour of set cement to the Portland stone that was mined on the Isle of Portland in Dorset, England.[5]

In February 1933, the Company was incorporated in Kenya with the first factory in Nairobi's Industrial Area. The Company had one cement mill and used imported clinker from India for cement manufacturing. The production capacity was about 60,000 tonnes of cement at the time.

In December 1956, construction of the Athi River facility started. The factory was commissioned in 1958 and consisted of a rotary kiln, a big cement mill which significantly increased production capacity to 120,000 tonnes per annum.

Over the years, EAPCC greatly expanded its production capacity. The Company can presently produce over 1.3 million tonnes of cement per annum at reduced cost especially with the June 2014 announcement of the construction of a four megawatt power plant would run on waste gases generated by the company factory at a cost of KSh800 million. This plant would lower the annual cost of running the Athi River factory by KSh500 million.[6]

Subsidiaries and Investments

The companies that comprise East Africa Portland Cement include, but are not limited, to the following:[7]

  • East African Portland Cement Limited – Athi River, Kenya - 100% Shareholding - The flagship company of the group. This unit engages in the production of cement.
  • East African Portland Cement Uganda Limited – Kampala, Uganda - 100% Shareholding - The principal activity of the Company is the sale of cement purchased from the parent company. It contributed to 1.24% of the group's revenue in the year ended 30 June 2012.[8]

Ownership

The shares of East African Portland Cement are traded on the Nairobi Securities Exchange, under the symbol: PORT. The shareholding in the company's stock as at 31 July 2014 was as depicted in the table below:[9]

East Africa Portland Cement Company Stock Ownership
RankName of OwnerPercentage Ownership
1National Social Security Fund27.00
2Government of Kenya25.30
3Cementia Holdings14.60
4Associated International Cement14.60
5Bamburi Cement12.50
6Others6.00
Total100.00

Board Room Wars

Cementia Holdings, Associated International Cement and Bamburi Cement are all direct or indirect subsidiaries of Lafarge SA. Giving Lafarge 41.7% of EAPCC. While the Government of Kenya claims to controls NSSF's Stake, giving the Government 52.3% control of the firm.[10]

This ownership structure has led to boardroom wars on who controls the company. The government has challenged Lafarge's shareholding in EAPCC due to the fact that Lafarge owns 41.7 per cent of East African Portland Cement Company and a further 58.9 per cent of Bamburi Cement two of three largest producers of the building material in Kenya. Accusing the firm is in violation of antitrust legislation.[11] Lafarge on their part started that they are a financial investor in EAPCC and they do not exert any operational leverage on the EAPCC Board.

The Kenyan courts ruled that EAPCC does not qualify to be a government Parastatal because NSSF shares do not belong to the State but to contributors. This means that the government of Kenya cannot control, hire or fire its management.[12] The ruling also stopped attempts by the government to make Lafarge dilute its stake in EAPCC. These board room wrangles negatively impacted the EAPCC's share price and market share.

Governance

East African Portland Cement Company is governed by a seven-person Board of Directors with Bill Lay serving as the Chairman.

See also

References

  1. ↑ East Africa Portland Cement 2012/13 Results
  2. ↑ East Africa Portland Cement - Company Data
  3. ↑ Editorial, Reuters. "${Instrument_CompanyName} ${Instrument_Ric} Company Profile | Reuters.com". U.S. Retrieved 2017-08-23.
  4. ↑ East Africa Portland Cement Company History
  5. ↑ Gillberg, B.; Fagerlund, G.; Jönsson, Å.; Tillman, A.-M. (1999). Betong och miljö [Concrete and environment] (in Swedish). Stockholm: AB Svensk Byggtjenst. ISBN 91-7332-906-1.
  6. ↑ "Portland in power plant plan to slash bill by Sh500m". Business Daily. Retrieved 2017-08-23.
  7. ↑ East Africa Portland Cement 2011/12 Annual Report Page 61 Archived 14 August 2014 at the Wayback Machine.
  8. ↑ East Africa Portland Cement 2011/12 Annual Report Page 75 Archived 14 August 2014 at the Wayback Machine.
  9. ↑ East Africa Portland Cement 2011/12 Annual Report Page 85 Archived 14 August 2014 at the Wayback Machine.
  10. ↑ EAPC Shareholding Structure
  11. ↑ "Competition agency to rule on State's row with Lafarge". Business Daily. Retrieved 2017-08-23.
  12. ↑ "Court blocks plan to dilute Lafarge stake in Portland cement". Business Daily. Retrieved 2017-08-23.
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