Bamburi appoints separate CEOs for Kenya and Uganda

Corporate News

Bamburi Cement factory in Athi River. Photo/File 

By DAVID HERBLING

In Summary

• 39 - Age of Mr Daniel Pettersson, who is slated to become the next CEO at Hima Cement in Uganda.

Cement manufacturer Bamburi is set to appoint chief executives for its Kenya and Uganda businesses in a shake-up that will see the firm separate management of the two operations.

Bamburi, which is majority-owned by French cement giant Lafarge, currently runs its Kenya and Uganda businesses as a single cluster. The Kenyan business has three subsidiaries; Bamburi Cement Ltd, Bamburi Special Products Ltd and Lafarge Eco Systems while the Ugandan unit is managed as Hima Cement Ltd.

“With a view to improving focus on our markets it has been decided that, starting July 21, 2014, the Kenya-Uganda cluster will be managed as two separate country organisations each with a country CEO and executive team,” said outgoing Bamburi chief executive Hussein Mansi in a staff memo seen by the Business Daily.

READ: Bamburi CEO reveals exit plan in staff memo

Bamburi Kenya will be headed by new chief executive Bruno Pescheux, who is currently the country CEO for Syria while the current Hima Cement general manager Daniel Pettersson will be promoted as the Uganda business’ boss.

“Bruno and Daniel will both report directly to Tom Farrell, group EVP (executive vice president) operations,” said Mr Mansi’s memo, which also announced his impending re-location to Lafarge Egypt by the end of next month.

The executive changes underline the Nairobi Securities Exchange (NSE)-listed firm’s quest to win back the highly competitive Ugandan cement market, whose underperformance was blamed for pulling down Bamburi’s net profit by a quarter last year.

“This new organisation will allow the business to successfully continue its transformation journey and achieve its ambitions by enabling greater flexibility in setting strategy and in responding to local customer needs,” said Mr Mansi.

Bamburi is now controlled 58.6 per cent by Suisse conglomerate LafargeHolcim, following the merger of Holcim and French firm Lafarge in April.

Mr Pescheux faces the daunting task of growing Bamburi Cement’s earnings in a market where increased competition from new players such as Savannah, Mombasa Cement and National Cement has kept cement prices flat over the past decade.

Bamburi reported that operating profit from the Kenyan unit remained flat last year due to lower demand in the first half of 2013, lower infrastructure spend as well as declining inland Africa exports.

Mr Pettersson, 39, will oversee operations at Hima Cement which reported a 58 per cent drop in operating profit last year due to margin pressure in the Uganda domestic market, reduced exports, frequent power outages and rising energy costs.

Bamburi’s net earnings dipped 25 per cent to Sh3.6 billion last year compared to Sh4.8 billion in 2012, attributed to profit margin pressures in Uganda and lower export sales from Hima Cement.

Its turnover decreased by 10 per cent to Sh33.9 billion last year also blamed on lower performance in Uganda attributable to competitive pressure and lower exports to inland Africa markets out of Uganda due to continued political tensions in those markets.

Mr Mansi’s tenure at Bamburi has seen sales from the Uganda factory drop two years consecutively to Sh14.5 billion or 43 per cent of total group revenue last year from 45 per cent (Sh17 billion) in 2012 and a peak of 49 per cent (Sh17.6 billion) a year earlier.