EABL taps former and serving chief executives in boardroom shake-up

Mr Japheth Katto has joined the EABL board. AFP 

By MUGAMBI MUTEGI, pmutegi@ke.nationmedia.com

In Summary

• EABL Monday announced the appointment of Japheth Katto (former CEO of Uganda’s Capital Markets Authority), Nehemiah Mchechu (head of Tanzania’s National Housing Corporation) and Andy Fennel (chief operating officer of Diageo Africa) to its board.
• This followed the September appointment of Jane Karuku, the president of Agra and former CEO of Cadbury East & Central Africa.

East African Breweries Limited (EABL) has turned to sitting and retired executives in the latest boardroom shake-up.

EABL Monday announced the appointment of Japheth Katto (former CEO of Uganda’s Capital Markets Authority), Nehemiah Mchechu (head of Tanzania’s National Housing Corporation) and Andy Fennel (chief operating officer of Diageo Africa) to its board.

This followed the September appointment of Jane Karuku, the president of Agra and former CEO of Cadbury East & Central Africa.

These appointments reflect the growing trend in corporate Kenya where former and serving executives are getting directorship positions as boards become aggressive in crafting growth strategies.

“Ms Constance Gakonyo, Mr Mark Bomani and Ms Siobhan Moriarty have resigned from the EABL board with effect from February 11, 2014,” the brewer said in a notice yesterday.

“Subsequently, Mr Japheth Katto, Mr Nehemiah Mchechu and Mr Andy Fennell have been appointed to the EABL board with effect from February 12, 2014.”

The EABL appointments will deepen the changing face of the brewer’s board, which started in 2012 with the exit of businessman Jeremiah Kiereini who served as chairman for 24 years.

Only three directors in EABL’s 12-member board have served for more than two years in a period that the brewer has had three group managing directors—Seni Adetu, Devlin Hainsworth and Charles Ireland.

These changes have given Diageo, which owns 50.03 per cent of EABL, four board seats up from two in 2008 —when its interests were represented by Mr Adetu and Nick Blazquez. Mr Blazquez is the brewer’s deputy chairman and president of Diageo, Africa.

The appointments were made as EABL posted the slowest first-half sales growth in four years on Friday, prompting the brewer to stop daily operations at its Nairobi plant.

READ: EABL stops daily brewing as growth hits a four-year low

The brewer says its Ruaraka plant is now running for five days a week —Monday through to Friday— as opposed to a seven-day operation because of the downturn in one of its top-selling products, the low-end Senator Keg beer.

EABL said duty imposed on Senator Keg had slashed sales volumes on the brand, warning that the slump may curb profit growth this year as it mulls over the viability of the low-end beer.

The new tax imposed on Senator Keg, previously exempt from excise duties, pushed its price 67 per cent to Sh45 and cut sales 85 per cent in the six months through December, leading to a 3.98 per growth in sales to Sh31.8 billion.

“We expect our revenue and profitability to grow marginally,” Mr Ireland told a news conference on Friday after EABL reported a five per cent increase in first-half profit to Sh3.9 billion.