22 July 2003

Bamburi cement in HIV/AIDS initiative
By Tabitha Mburu

BAMBURI Cement Limited has embarked on a HIV/Aids intervention programme incorporating local communities where its business units are located.
Bamburi’s week-long drive launched in Nairobi, Mombasa and Athi River last week provided voluntary counseling and testing services for its employees and members of the public. The factory employees visited families in Mukuru Kwa Njenga slum in Nairobi where they distributed food and clothing to those infected and affected by HIV/Aids.

The programmes is aimed at enhancing the availability of information on HIV/Aids and at the same time provide access to counseling and testing services as well as reproductive healthcare.

The company’s human resource and organisation director, Epimach Maritim, said that by including the local communities in the intervention programme, Bamburi is re-emphasising its commitment to adding value to people’s lives.
In the past, Bamburi’s community activities have been focused on the environment, education and economic empowerment of the local population where they are located. The campaign worth over one million shillings also included several lectures by health personnel, video shows and demonstrations by the company peer educators.

Maritim emphasized that the company’s under its non-discriminatory policy would continue to provide anti-retroviral therapy to infected employees and added that the company had invested Shs 17 million in its HIV/AIDS programme in the past five years.

Cement-maker braces itself for dusty turf war
Bamburi hopes to reap from construction bonanza
By Washington Akumu

Time is of essence at Bamburi Cement as the firm awaits the government’s post-transition promise of a construction bonanza.
But even as its top managers lobby hard and cross their fingers on the direction of the government’s slum upgrading and road building programme – and whether it will be favourable to their business – their fire-fighting abilities are being severely tested on yet another emerging battle-front.

Share of the market

Behind the scenes, a high-stakes battle for market share is evolving with one of its peers, which has seen Bamburi lose about 4 percent of its strangle-hold in key regions over the last three months.

Stung by the prospect of ceding further ground, the market leader is now aggressively playing catch-up as it attempts to even out the losses and maintain its traditional dominance, which stood at 58 percent at the end of last year.

“The loss of market share has been triggered particularly by the actions of a competitor, which adopted a different commercial policy.”
“Even then, we have to put in place counter-measures and hope to have regained our market share by the end of this month,” says Managing Director Didier Tressarrieu at a press briefing where he announced a 15 percent reduction in pre-tax profit to Sh831 million.

In his estimation, the change in pricing and discount policy at the competitor, which he named as the East African Portland Cement, had resulted in loss of sales of between 15,000 and 20,000 tonnes.

The Athi River-based parastatal has been sprucing up its distribution regime and giving itself a sharper market focus since a new management led by Emmanuel Charo took over early this year.

Clearly, a new EA Portland has come to town and the Bamburi management is not exactly thrilled by its antics.

Bamburi’s management blamed its relatively poor half-year turnout on a high cost operating environment, thanks largely to an unreliable and expensive electricity supply and a steeper-than-expected depreciation in the Ugandan shilling.

The firm – the local scion of French construction giant Lafarge – owns Hima Cement in Uganda and also exports to that country from Kenya. “In our financial modeling, we had anticipated a 4 percent depreciation in the shilling. But that gradient has been much steeper than we anticipated, pushing the currency down by 10 percent between January and March. We hope it will stabilize,” said Hima managing director and former Bamburi finance director Mbuvi Ngunze.

The firm does its factor costing and budgeting in dollars, and Mr. Ngunze estimated that it may have lost some $400,000 to $500,000 to the currency dip.
Even then, Bamburi will take solace in the fact that its overall turnover actually grew by 5 percent to Sh4.8 billion, buoyed by 10 percent growth in demand for cement in both the key Kenya and Uganda markets.

Cement stocks on the Nairobi bourse have been buoyed by anticipation pegged on government talk of turning building and construction into a major economic recovery strategy pillar.

According to data from fund managers AIG Global, this “hope” has seen the three cement stocks rise phenomenally in the last six months, with both Athi River Mining and EA Portland process gaining 54 percent and Bamburi 48 percent.
In fact, some sceptic analysts are already saying that the cement stocks could be over-valued, and a correction could be on the cards soon.

Higher provisions

In his June Budget Speech, Finance minister David Mwiraria said the sector was anticipated to grow at 16.7 percent. The government also increased provisions for road building from Sh13.3 billion to Sh16.9 billion for 2003/4.

And as Public Works minister Raila Odinga continues to make all the right noises about slum upgrading and roads construction, Bamburi – whose major expansion in the last six years has given it enviable capacity, though still not fully employed – will be hoping that it will be at the table when the talk gets to the site.
But construction is a long-term business and perhaps Bamburi’s only dependable ally will undoubtedly be, time.

But will the shareholders – who are set to receive a similar 20 percent interim dividend as last year – buy into this mantra? Again, Bamburi will be summoning the finality of time.

Last week, hot on the new of the results, Bamburi stock closed the week at Sh79.50, against a high of Sh85.00 previously, representing a loss of Sh5.50, albeit on a lower volume of 2,000 units.

Farmers given tips on sustainable agriculture
Standard Correspondent

OVER 150 subsistence farmers from Kilifi, Kisauni, Kwale and Taita divisions, Coast Province, were last week trained on technical and capacity enhancement.
The training organized by Baobab Trust, a non-profit subsidiary of Bamburi Cement Ltd, focused on the need to practice sustainable agriculture.

They were taught how to adopt mixed farming, integration, intercropping, crop diversification, economic use of fuel wood, bee keeping, sustainable land utilization and organic pest and disease control, among others.

Marion Teichmann, an agricultural sector advisor with the German Development Service (DED), is charge of technical support at the trust. She said there was need for smallholder farmers to understand the importance of sustainable agriculture for purposes of income generation and food security.

The field open day, which shall be held twice every year, was organized by the trust in collaboration with the Ministry of Agriculture at the Baobab Farm, Bamburi.