NAIROBI, AUGUST 14, 2018 — Kenyan billionaire Wilfred Murungi has parted ways with struggling cement maker ARM Cement Limited (Plc), ending his 24-years stint as a director at the company.
Murungi who also had a short turn as chairman of the board, since October last year, announced his retirement in a letter dated August 10.
“I wish to inform all shareholders that after 24 years period serving as a director of ARM Cement PLC, and briefly as Board Chair, I will officially be retiring effective August 13, 2018,” Murungi said in his announcement.
“In the period I have served in the Board, I have seen the Company experience tremendous growth from a small plant producing 200 tonnes of cement per day, to the giant enterprise it is today producing 8,000 tomes of cement per day, certainly one of the largest cement producers in the East African region,” he added.
He pegs the company’s long term achievements to continuous expansion projects aimed at increasing production capacity and markets across the region.
He leaves the company at a critical juncture when the cement manufacturer is struggling to stay afloat in the wake of increasing competition in the market.
ARM recorded a net loss of Ksh6.55 billion for the year ended December 2017, sinking deeper into losses as the company struggled with low sales.
The loss widened from Ksh2.80 billion the company posted in 2016. Its turnover (revenues from sales) dipped 32 per cent to Ksh8.7 billion from Ksh12.8 billion the previous year.
Murungi who acknowledges turbulence at the firm has however expressed optimism of a turnaround as he hands over the mantle to the new chairman Linus Gitahi.
“In common with the experience of fast growing companies worldwide, the company has experienced turbulent operational and financial challenges, but has been able to overcome these challenges through the resilience and sustained efforts of the board and management,” Murungi said.
He said to overcome these challenges and to ensure a turnaround of the company’s performance; the board has “unanimously” agreed to make key changes to the leadership of the company both at management and at board level.
Former Nation Media Group Chief Executive Linus Gitahi takes over as chairman. The board also welcomes former French Minister of Cooperation Thierry Metro as a non-executive. Non-independent director.
Metro has also worked with Total Group and Lafarge (French industrial company specializing in cement, construction aggregates and concrete.)
Joining Murungi on the exit door is deputy managing director Surendra Bhatia who is also retiring.
“I wish to welcome Linus Gitahi and Thierry Metro. Mr. Gitahi will take over as board chair while Mr. Metro experience in the cement business will be critical as the board takes the lead in spearheading the turnaround of the company,” Murungi said.
The Nairobi Security Exchange listed firm blamed its deep financial losses to the Tanzania government’s move to burn coal imports which it said affected its operations.
This coupled with stiff competition from other players and the slowdown of Kenya’s economy as a result of last year’s prolonged general elections proved difficult for the company to make profit.