Kenya Insights

Tag: Kalahari Cement

  • Lobby Group Wants Sale of EAPC To Controversial Tanzanian Tycoon Stopped Says Its Threatening Kenya’s Strategic Economic Interests

    Lobby Group Wants Sale of EAPC To Controversial Tanzanian Tycoon Stopped Says Its Threatening Kenya’s Strategic Economic Interests

    A consumer rights lobby has moved to the High Court seeking to block the sale of the National Social Security Fund’s stake in East African Portland Cement to a Tanzania-linked firm, arguing that the transaction threatens Kenya’s economic sovereignty and could lead to monopolistic control of the cement sector.

    The Consumer Federation of Kenya, through secretary general Stephen Mutoro, has filed a constitutional petition challenging the lawfulness of NSSF’s planned disposal of its 27 percent shareholding in the Athi River-based manufacturer to Kalahari Cement Limited for 1.6 billion shillings.

    The lobby warns that the deal could cede control of a strategic state-linked asset to foreign interests without proper regulatory scrutiny.

    Kalahari Cement, which is controlled by Tanzanian tycoon Edhah Abdallah Munif through Mauritius-based investment vehicles, already holds a 29.2 percent stake in EAPC acquired from Swiss multinational Holcim earlier this year for 718.7 million shillings.

    With Bamburi Cement, which is fully owned by Mr Munif’s Amsons Group, holding an additional 12.5 percent of EAPC, the proposed transaction would give the Tanzanian conglomerate effective control with a combined 68.7 percent stake.

    The petition, filed at the Milimani Constitutional and Human Rights Division, names the Capital Markets Authority, Competition Authority of Kenya, NSSF, Kalahari Cement, EAPC and the Attorney General as respondents.

    Cofek accuses regulators of facilitating what it terms a secretive transaction involving pension assets without public participation or compliance with constitutional safeguards on transparency and prudent financial management.

    Mr Mutoro argues in court papers that the NSSF stake, held in trust for Kenyan workers, cannot be transferred without full transparency, due process and regulatory scrutiny.

    The group contends that regulators failed to verify whether the transaction underwent mandatory valuation reviews, capital markets disclosures or competition assessments despite repeated requests for information.

    Cofek claims that CMA and CAK allegedly withheld critical information, violating constitutional rights related to access to information and fair administrative action.

    The lobby argues that the transaction excluded public input, transparent valuations and competitive bidding, while sidelining minority shareholders’ pre-emptive rights.

    The petition raises concerns about potential market concentration in Kenya’s cement industry.

    Mr Munif’s Amsons Group completed the full acquisition of Bamburi Cement in December last year for 23.6 billion shillings , giving it significant influence in the sector.

    Cofek warns that Kalahari Cement, though locally incorporated, acts as a proxy for its Tanzanian parent, enabling what it calls regulatory circumvention and anti-competitive consolidation.

    The lobby cites Amsons Group’s aggressive regional expansion as evidence of credible monopolistic risks that could inflate cement prices and harm consumers.

    At the close of the NSSF deal, Mr Munif would directly and indirectly control the equivalent of 31 percent of the Kenyan cement sector’s production capacity , setting up intensified competition with other billionaires in the industry including Narendra Raval and the Rai family.

    Cofek is seeking conservatory orders freezing any further steps in the transaction, including sale, transfer or registration of the NSSF shares in favor of Kalahari Cement.

    The group also wants the court to compel CMA to conduct a full compliance inquiry and direct CAK to carry out merger and competition assessments to determine whether the acquisition could create dominance or monopoly risks.

    The lobby argues that once shares are transferred, the harm will be irreversible, making it impossible to recover public leverage or forestall potential anti-competitive behavior.

    The group contends that damages would not be an adequate remedy since share transfers are irreversible and once control changes hands, judicial review would be rendered meaningless.

    EAPC’s strategic value extends beyond cement production.

    The company’s Athi River plant sits on 3,000 acres of prime land, and critics have questioned whether the real value lies in real estate rather than cement manufacturing.

    The firm traces its origins to 1933 as a colonial-era venture originally owned by Blue Triangle Limited and the Kenyan government before being privatized in the 1990s.

    NSSF acquired its 27 percent stake during a 2009 recapitalization meant to safeguard workers’ interests, a mandate Cofek argues is now compromised by the proposed sale.

    The pension fund has described the disposal as part of efforts to liquidate underperforming assets, but the timing and choice of beneficiary have drawn scrutiny.

    The case highlights broader questions about cross-border investment reciprocity.

    Tanzania mandates 51 percent local ownership in mining and energy sectors, while Kenya’s foreign investment rules remain less stringent.

    Critics argue that such asymmetries disadvantage Kenyan enterprises seeking opportunities abroad while exposing critical domestic sectors to foreign control.

    The High Court has scheduled a mention for January 27, 2026, to assess respondents’ filings in response to the petition.

    Regulators are expected to demonstrate that rigorous oversight was applied to the contested deal and explain their approval processes for the transaction.

    Kalahari Cement has stated that it does not intend to make a takeover offer for EAPC or delist the company from the Nairobi Securities Exchange after completion of the proposed transaction.

    The firm has described the investment as part of a strategic long-term plan aimed at advancing national industrialization and providing capital and technical resources to transform EAPC into one of Kenya’s leading cement manufacturers.

    However, Cofek maintains that the public interest demands full disclosure and competitive processes for disposal of state-linked assets, particularly those held by pension funds on behalf of workers.

    The petition frames the sale as a test of Kenya’s governance frameworks and the effectiveness of regulatory oversight in protecting strategic economic interests.

  • Tanzanian Tycoon Exposed in Insider Dealing Scandal Over Portland Cement Acquisition

    Tanzanian Tycoon Exposed in Insider Dealing Scandal Over Portland Cement Acquisition

    Edhah Abdallah Munif’s strategic moves raise serious questions about market manipulation and anti-competitive practices in Kenya’s cement industry

    Tanzanian business magnate Edhah Abdallah Munif finds himself at the center of a brewing scandal as competition authorities scrutinize his calculated acquisition strategy that has positioned him to control nearly one-third of Kenya’s cement market through potentially illegal information sharing arrangements.

    The controversy centers on Munif’s audacious bid to acquire an additional 29.2% stake in East Africa Portland Cement Company (EAPC) for Sh718.7 million, a deal that comes suspiciously close on the heels of his December 2024 acquisition of Bamburi Cement for Sh23.6 billion.

    The Web of Control

    What makes this acquisition particularly troubling is the intricate web of cross-ownership it creates. Through his investment vehicle Kalahari Cement, Munif is purchasing 26.32 million EAPC shares from Swiss multinational Holcim at Sh27.30 each – a staggering 74.5% discount to the market price of Sh47.65 per share.

    This discount alone raises red flags about potential insider dealings. Why would Holcim sell at such a significant loss unless there were underlying arrangements that benefited both parties at the expense of market transparency?

    The deal will make Munif the single-largest shareholder in EAPC with a 41.75% stake, while his Amsons Group already owns Bamburi Cement outright, which itself holds 12.5% of EAPC. This cross-ownership structure creates an alarming concentration of market power.

    Market Manipulation Concerns

    Industry analysts are questioning whether Munif’s strategy constitutes a systematic attempt to manipulate Kenya’s cement market. His companies will control the equivalent of 31% of the country’s cement production capacity of 14.5 million tonnes per annum, giving him unprecedented influence over pricing and supply chains.

    The Competition Authority of Kenya (CAK) has confirmed it will investigate the deal for potential violations of Section 21 of the Competition Act, which prohibits restrictive trade practices including price fixing, collusive tendering, and market division.

    “Cross-directorship may facilitate outlawed conduct such as the exchange of commercially sensitive information or market coordination,” warned CAK Director-General David Kemei, signaling the authority’s serious concerns about the arrangement.

    The Discount Scandal

    Perhaps most damning is the massive discount at which Munif is acquiring his EAPC stake. At yesterday’s closing price, EAPC shares traded at Sh47.65, yet Holcim is selling to Kalahari Cement at just Sh27.30 – a discount that suggests either gross undervaluation or preferential treatment.

    Even more shocking, both the market capitalization of Sh4.29 billion and Kalahari’s purchase valuation of Sh2.46 billion fall far below EAPC’s book value of Sh20.4 billion, raising serious questions about asset stripping or manipulation of company valuations.

    Regional Empire Building

    Munif’s cement empire extends beyond Kenya’s borders, creating potential for regional market manipulation. Through Pan African Cement, he controls Tanzania’s Mbeya Cement Company, while his diversified portfolio includes the Camel Oil fuel brand operating across Tanzania, Kenya, and Mozambique, plus freight operations through East Africa Warehousing and Kalahari Trans Zambia.

    This regional network provides multiple channels for potentially coordinating market activities across East Africa’s cement and related industries.

    The CAK has warned it may impose “structural or behavioural remedies” including limitations on directorships and restrictions on information sharing between Munif’s companies. However, critics argue that such measures may be insufficient to prevent the kind of market coordination that this ownership structure enables.

    The authority’s admission that it learned of the deal through media reports rather than formal notification also raises questions about regulatory oversight and whether Munif’s team deliberately avoided proper disclosure procedures.

    The cement industry has already shown signs of stress, with production declining from 9.62 million tonnes in 2023 to 8.85 million tonnes in 2024. Munif’s consolidation strategy comes at a time when the market can ill afford further concentration that could limit competition and inflate prices for consumers.

    His control over both Bamburi (22% market capacity) and significant influence in EAPC (8.96% capacity) positions him to potentially coordinate pricing and production decisions that could harm consumers and smaller competitors alike.

    The Billionaires’ Battle

    Industry observers describe the situation as setting up a “billionaires’ fight” for control of Kenya’s cement market, with Munif facing off against established players like the Rai family (Rai Cement) and Narendra Raval (National Cement, Athi River Mining, and Cemtech).

    However, Munif’s cross-ownership strategy gives him advantages that his competitors lack, potentially allowing him to access and coordinate sensitive business information across multiple major players.

    As the CAK prepares its formal investigation, the business community will be watching closely to see whether Kenya’s competition laws have sufficient teeth to prevent what appears to be a systematic attempt to consolidate market power through questionable acquisition practices.

    The scandal has broader implications for Kenya’s business environment and foreign investment climate. If wealthy foreign investors can circumvent competition laws through complex ownership structures and preferential deal-making, it undermines the principles of fair market competition that Kenya has worked to establish.

    The outcome of this case could set important precedents for how Kenya handles cross-ownership issues and whether its regulatory framework can effectively protect consumers and smaller businesses from anti-competitive practices by well-resourced international investors.