Adan extends New KCC chief ’s term to next year

Industrialisation secretary Adan Mohamed has extended the contract of New KCC’s managing director to next March.

Dr Kipkirui Langat took over as the milk processor’s chief in March 2011 for a three-year term and will now serve for another 12 months.

“The Cabinet Secretary for Industrialisation and Enterprise Development re-appoints— Kipkirui Langat (Dr.) to be the managing director of the New Kenya Co-operative Creameries Limited, for a period of one year, with effect from the March, 15th 2014,” read the gazette notice signed by Mr Mohamed.

The Business Daily could not establish why Mr Langat’s contract has been extended. Companies sometimes extend chief executives’ contracts for shorter periods to identify people to take over those positions.

In November, CIC Insuranceextended Nelson Kuria’s contract by two years as it establishes a succession policy in time for his retirement in 2016.

Safaricom in July extended the contract of its CEO Bob Collymore by two years while Kenya Airways added Titus Naikuni another year to his contract that ended November.

Mr Langat joined New KCC when it had gone for more than a year without a managing director after Francis Mwangi’s, the Muranga governor, was not renewed.

The contract extension comes as New KCC prepares for privatisation and shifts in the milk processing market following a string of acquisitions by its top rival Brookside.

New KCC was initially owned by dairy farmers until it ran into financial problems in the 1990s. The government bought it back in 2004 and restructured it.

The Privatisation Commission is working on the sale of New KCC and the government is keen to offer farmers a 42 per cent stake, employees (four per cent) and 42 per cent would be floated at the Nairobi bourse. The government is interested in a 20 per cent stake.

The firm also faces stiff competition for market share and raw milk from a re-energised Brookside, which is associated with the Kenyatta family.

Brookside recently acquired Molo Milk and Limuru Milk, pushing its share of the processed milk market to 44 per cent. New KCC commands a 20.8 per cent of the market.