In Kenya, antitrust authorities are investigating Lafarge’s influence on the national cement industry, given its 59% stake in Bamburi Cement and 42% holding in East Africa Portland Cement (EAPCC).
Director General of the Competition Authority of Kenya, Francis Kariuki, told Bloomberg, “The current arrangement between Lafarge and EAPCC from the face value of it may be deemed to be an unwarranted concentration of economic power because of the close directorship Lafarge is having in EAPCC and Bamburi”. Bloomberg reports that the authority is investigating cement prices in the country as shareholders and government argue over ownership of EAPCC, in which Kenya’s Treasury holds a 25% stake and the state-owned National Social Security Fund has a 27% stake. The government would like to reduce Lafarge’s stake in EAPCC, which it fears is reducing competition in the country and creating high prices.
“We have seven players but the prices of cement do not reflect that sort of scenario,” Kariuki told Bloomberg. “South Africa, for example, has fewer players but the price of cement there is cheaper. Here the price of cement continues to rise and Kenyans are paying a damn high price. This is certainly a red flag.”
Meanwhile, Reuters is reporting that EAPCC expects profit for the full year through June to fall by more than 25% after the company released a statement blaming rising competition and high staff costs for the forecast.
Edited from various sources by Katherine Guenioui
Read the article online at: https://www.worldcement.com/africa-middle-east/16052014/antitrust_authorities_probe_lafarge_stake_in_kenyan_cement_industry_208/