East African Cables CEO resigns after 7 years at the helm

What you need to know:

The outgoing CEO has worked at EAC for a total of 16 years, having held other management roles before rising to lead the Nairobi-based firm.
The board said the company more than tripled the capacity of its operations during Mr Mwangi’s tenure.
Mr Mwangi, a certified public accountant and a holder of an MBA from Strathmore Business School, leaves the company at a time when it is in the middle of a major expansion plan.

East African Cables (EAC) chief executive George Mwangi is set to leave at the end of September, ending a seven-year reign at the company.

Mr Mwangi, 42, communicated his resignation to the board of directors at a meeting held on Tuesday.

“Mr George Chege Mwangi… tabled his resignation and the board resolved that the said resignation be and is hereby approved and accepted,” EAC said in a statement sent to the Nairobi Securities Exchange (NSE).

The cables manufacturer did not say why Mr Mwangi was leaving the company. EAC’s net profit declined 14.3 per cent to Sh341.1 million in the year ended December as the cost of sales rose faster than revenue, which increased 13.2 per cent to Sh5 billion.

The outgoing CEO has worked at EAC for a total of 16 years, having held other management roles before rising to lead the Nairobi-based firm.

Tripled capacity

He was appointed CEO after the exit of Mr Mugo Kibati in 2008. The board said the company more than tripled the capacity of its operations during Mr Mwangi’s tenure.

Mr Mwangi, a certified public accountant and a holder of an MBA from Strathmore Business School, leaves the company at a time when it is in the middle of a major expansion plan.

It is building a new factory in Nairobi’s Industrial Area that will produce medium voltage wires to feed rising demand by regional power companies which currently rely on imports from India.

READ: EA Cables buys two-acre land for new factory

The investment will see the company spend about Sh1 billion to produce wires with capacity to transmit up to 110 kilovolts of power. The cables will be sold to energy firms in East Africa, which spend billions of shillings on imported wires for power transmission and distribution.

The plant expansion is expected to be completed by December and start producing the first batch of cables in the first quarter of 2016.

Rapidly growing demand for power in tandem with economic growth has seen Kenya and neighbouring countries draw up ambitious targets for stepping up electricity generation and transmission.

This is the first time that EAC will produce medium-voltage cables, which the firm says will enable it to enter a market segment that has been dominated by Indian manufacturers and other Asian-based producers.

Besides building the plant, the company is also stepping up efficiency at its Kitui Road factory by installing modern machines, underlining its confidence in the demand for its products.