Bamburi Cement: How we clinched SGR supplies deal
Bamburi Cement has a tight grip on the country’s cement market, and according to country CEO Bruno Pescheux, the firm is not about to relinquish its position as the country’s largest producer.
This is part of the reason the company was willing to change its standards to secure a supplier deal with China Road and Bridge Corporation, the contractor for the standard gauge railway (SGR) project.
Mr Pescheux added that his firm — a subsidiary of France’s Lafarge, one of the world’s largest suppliers of building materials — is secure enough in its investments to face off competition from Africa’s richest man, Aliko Dangote, who has in the past announced plans to put up a cement plant in Kenya.
And while the CEO was willing to talk about plenty, he said he could not comment on whether Lafarge’s stake in East African Portland Cement amounts to a conflict of interest.
How did you get the deal to supply cement for the SGR project?
“The Chinese said, ‘We know Bamburi, they produce cement of good quality and quantity’.
But they wanted products that would comply with Chinese standards. Bamburi also has its standards. We were, therefore, forced to change our standards. We did not want to lose the market to imports, so we adopted their standards.
How has the SGR project added to your bottom line or market share?
What we should not forget is that this project is supplied with Kenyan cement. This was not obvious at the very beginning, but at least now, the cement is manufactured and produced in Kenya.
This means that the taxes that I am paying are more now than before as I am selling more. It also means that I have employed more people for maintenance and repair — we cannot afford to leave the plant idle for a few days.
It has also had a positive effect on the company’s financial performance, and we have increased our size because we did not want to lose what is the core of our business, which is the customer base of the company. We could have lost market share if we had allowed the cement to be imported.