June 2003

Bamburi Cement: Optimism Despite Dip in Profits, Market Share

Mr. Didier Tresarrieu, Bamburi MD, addressing journalists recently when he announced the half-year results for the financial year ending June 2003

Slow economic growth, a slow moving construction industry and poor business operating conditions in Kenya, particularly poor power quality have contributed to contrasting fortunes for Bamburi cement in the last six months.

A five percent improvement in turnover to Sh4.8 billion over that period from Sh4.6 billion over a similar period last year was tampered by a marginal decline in profits to Sh831 million in the first six months of the year, from Sh989 million during a similar period last year and Sh610 million in 2001.

Making the announcement at a press conference in Nairobi recently, Bamburi Cement Managing Director, Didier Tresarrieu also attributed the fall in profits to major maintenance works in the Uganda operations of the company, Hima Cement.

Mr. Tresarrieu said that the company had taken action to regain market share and now anticipates improved operating conditions, which should result in a better second half performance.

Rapid shilling appreciation in Kenya also affected exports from the country. Mr. Tresarrieu also cited increased competition as well as customers turning to other markets to source their products as a cause of a dip in market share he estimated at 5 percent.

Cementing relations with employees and the community:

Bamburi Cement Ltd. has established itself as a firm that actively pursues a positive coexistence with its people and the community at large. It is our corporate citizen of the month for outstanding performance on the Social Responsibility scene for its unique approaches to matters affecting the community and safeguarding and promoting the interests of its employees, with results that compare with few on the Kenyan corporate scene.

While it has become the trend for corporate organizations to plough back some of their profits into the communities in which they operate, one may be hard-pressed to measure the impact of these donations, especially where such activities are conducted in a sporadic manner. Many organizations successfully get away with donating one cheque here and one cheque there, deriving maximum mileage from the publicity bursts that accompany such gestures.

Other organizations invest time and thought, drafting a clear-cut social responsibility policy, identifying areas of need within their communities, and creating long-term plans and strategies that would in later years yield positive results for these communities. Bamburi Cement Limited is one organization that has since its establishment in 1952 maintained a streamlined approach in executing various social responsibility projects.

Environment, education and health form the pillars of Bamburi Cement’s social responsibility policy. For each of these, the decision to partner with communities has always been driven by the company’s long-term vision for sustainable development, a concept that flows from its principle shareholder and the world’s largest producer of building materials, Lafarge.

Bamburi Cement recently introduced the Green Schools Project, a partnership with local communities in arid and semi arid areas aimed at increasing the forest cover and improving climatic conditions.

The multi-million shilling project will see Bamburi Cement erect water tanks in rural schools, as well as guide these communities in planting tree seedlings. The ultimate aim of this project is the enhancement of learning atmosphere in hardship areas, where school children often double up as sources of manual labour, trekking several kilometers in search of firewood and water.

The idea of the Green Schools Project draws from the successful environment rehabilitation projects initiated by Bamburi Cement in Mombasa, where disused limestone quarries have since 1966 been successfully rehabilitated. These today burst with diverse income generating activities such as agriculture and tourism.
At a regional level, Bamburi Cement Limited has also entered into partnership with the WWF East Africa Regional Programme Office, and is currently involved in several projects aimed at improving the co-existence between man and animals.

A retrenchment programme with a difference

Like any other organization undergoing change in the nineties, Bamburi Cement Limited introduced a rigorous restructuring programme in the late ‘nineties that saw it streamline its operations. Alongside the structural adjustments came the job cut-backs. The company put in place a redeployment programme that has in the past five years created hope for many former employees. Today more than 180 former employees run successful businesses, thanks to an employment separation seminar and on-going business counseling programme introduced by the company. These new generation businessmen also have access to a Shs 20 million revolving fund established by the cement manufacturer and managed by Barclays Bank of Kenya.

Indeed, Bamburi’s commitment to creating a difference in the lives of its associates sounds the importance with which it executes its responsibilities as a corporate citizen.

A proactive approach to tackling HIV/AIDS head-on: Bamburi’s breakthrough

Two decades after the first clinical evidence of HIV/AIDS was reported in the United States of America, sub-Saharan Africa today accounts for 71 percent of the 40 million people living with the disease. Indeed HIV/AIDS has been declared a threat to the economic, political, and social stability, as it eats into the very fibre of development. In November 1999, the disease was declared a national disaster by the then president, Daniel arap Moi.

Happy on their own

Today more than 180 former employees of Bamburi Cement run successful businesses, thanks to an employment separation seminar and on-going business counseling programme introduced by the company.

At the time, it was disclosed that the country was losing 700 patients to HIV/AIDS related illnesses on a daily basis.

“From the early 1990’s many corporate organizations were already grappling with the ripple effects of the scourge”, intimates Epimach Maritim, the Human Resources and Organisation Director at Bamburi Cement Limited. Many organizations found themselves holding the short end of the stick as medical costs sky-rocketed, productivity levels dipped, and a significant number of their skilled employees succumbed to the disease.

Bamburi Cement Limited has also entered into partnership with the WWF East Africa Regional Programme Office, and is currently involved in several projects aimed at improving the co-existence between man and animals

Bamburi Cement Limited inaugurated a proactive HIV/AIDS awareness campaign in 1992. “With health being an integral pillar of the company’s corporate social responsibility policy, we felt the need to empower our employees with all the necessary information that would help them understand this relatively new disease”, says Mr. Maritim. The company identifies a group of employees, who after an intensive training would commence a peer education campaign in the company’s cement production plant in Mombasa.

The peer education programme proved an effective vehicle for empowering employees and their families with information, and would soon be extended to other plants and companies under the Bamburi umbrella.

“With health being an integral pillar of the company’s corporate social responsibility policy, we felt the need to empower our employees with all the necessary information that would help them understand this relatively new disease”

Today, Bamburi Cement Limited has a team of 30 peer education counselors, who undergo regular trainings organized by the International Center for Reproductive Health and reach out to the 500 employees of the cement manufacturing company. The Peer Education Programme has greatly enhanced information flow on the HIV/AIDS disease; the prevalence rate has decreased, with the number of infected employees remaining constant, between 25 and 30, in the past ten years.

While the Peer Education Programme has contributed greatly to tackling the presence of the scourge on the workplace, the non-discriminatory policy adopted by Bamburi Cement Limited has also enable the company to articulate its core values.

A signatory to the French Business Club HIV/AIDS Charter, Bamburi Cement does not conduct pre-Aids testing of potential employees, nor discriminate against employees found to be infected with the human immuno-deficiency virus. The company has over the years provided free anti retroviral therapy to infected employees and their families.
“As we celebrate the success of the battling the scourge in the workplace, we are confident of achieving similar scores in the communities where we operate”, says Mr. Maritim, who also discloses that the company invested Sh17.5 million in its HIV/AIDS intervention programme in the past five years.

The company recently launched the second phase of its HIV/AIDS Awareness Programme that will see its activities extend to the communities where its business units are located.