Portland Cement to hire technical expat in turnaround plan

Cement maker EAPCC is set to hire a technical expat from French conglomerate and major shareholder Lafarge as part of the company’s efforts to rebound from loss.

The East African Portland Cement Company (EAPCC) has signed a contract with Lafarge, which owns 41.7 per cent of the company, in the wake of a drop in market share and a net loss of Sh67.8 million for the half year ended December.

The manufacturer made a net loss of Sh386 million for the year ended June 30.

EAPCC’s decision to bring in expatriates from Lafarge is similar to moves taken by several Kenyan companies with big international shareholders that have in the past called upon them for technical and monetary support.

“The chief operating officer’s role will be to take charge of the day-to- day operations of the plant, logistics and customer service,” Kephar Tande, EAPCC managing director, told the Business Daily on Friday.

“This is a major plank in the turnaround strategy and will provide the expertise needed to support the supply chain. The contract is for an initial phase of six months renewable for 24 months.”

Telecommunications company Safaricom, beer maker East African Breweries Limited (EABL), cement manufacturer Bamburi and oil marketer Total Kenya are some of the local firms that regularly request for support from their multinational shareholders in an effort to transfer their global successes to the Kenyan units.

Telecommunications firms Airtel Kenya and Orange have also in the past hired expatriates for their commercial and technical divisions.

Lafarge in December appointed two independent directors to represent its interests on the EAPCC board, one more than the number the conglomerate has had in the past.

The expat’s brief will be to help improve technical and maintenance issues of their plants and machinery, including installing a new mill and clinker factory that will push EAPCC’s annual capacity to two million tonnes.

“The company will be drawing from the expertise of one of its major shareholders, Lafarge, for technical support, through secondment to EAPCC of a technical person to support management,” said chairman Bill Lay.

Portland Cement’s earnings have in past years been hurt by stiff price competition, high staff costs and the weakening shilling as well as boardroom wrangles that have since cooled off.

The firm’s administrative costs in the year to June 2014 increased by Sh700 million following a restructuring of its management, staff compensation and an increase in staff gratuity.