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By Steve Umidha
The new managing director of Bamburi Cement, Seddiq Hassani has been getting to grips with the role he took over from Eric Kironde on February 28, 2018 – and just over two years, the soft-spoken nyama choma lover tells me that he already feels at home.
“It was not an easy decision by the way to make that switch to relocate to Kenya, but after my initial visit with my wife and deep consultations, I decided to take the risk, which I believe has paid off and I feel settled now,” reveals Hassani who is originally from Morocco.
Mr. Hassani took over from his predecessor, who had been at the helm in an acting capacity between October 2017 and February 2018, at a time when the industry was battling delicate challenges in recent years despite real estate sector boom and increased investment in public infrastructure.
During that period for instance, in August 17, 2018, ARM Cement was placed under administration by Muniu Thoiti and George Weru of PricewaterhouseCoopers (PwC) following the exit of its chief executive Pradeep Paunrana.
And nearly three years on, the 50 –year old mechanical engineer who previously held the position of Auditor of Arthur Andersen and Control Manager & CEO-Lafarge Gypsum Morocco at LafargeHolcim Maroc SA, in an exclusive interview at his office in Industrial Area, Nairobi, Hassani expresses buoyancy and confidence, one, about the industry, and secondly on his employer, Bamburi Cement, which remains the only profitable NSE-listed cement maker today.
“Confidence is coming from two areas, the lifting of law capping interest rate and there is willingness from the government to make the affordable housing a reality,” narrates Hassani who holds a PhD in Mechanics, whose firm conviction is being backed by what he considers is driven by growing need in the cement products as well as political will to support affordable housing initiative.
“With the lifting of law capping interest rate I believe should see the market recover this year,” he says.
Kenyan President Uhuru Kenyatta in November last year signed into law the Finance Bill 2019 after the bid to remove a cap on commercial lending rates was passed in Parliament following a quorum hitch, and potentially boosting the flow of credit to the economy and return of expensive credit – and as a result the Bamburi Cement boss this will in the long term open the credit market for traders and particularly SMEs.
The move to rescind the controversial law on interest rates came into force in September 2016, capping lending rates at four percentage points above the prevailing Central Bank Rate, which the government said was an effort to support the affordable housing pillar of the Big 4 Agenda, which exempts the National Housing Development Fund from income tax.
As a result high-risk borrowers like individuals and small businesses now face an increase in loan rates of up to three percentage points following the removal of the legal cap on commercial lending charges.
The repeal was seen as a big win for commercial banks, the Central Bank of Kenya and international financial institutions such as the IMF and the World Bank which had all been pushing for the removal of rates caps, arguing that the law had failed to achieve its purpose of freeing affordable credit to the private sector.
While there has been improvement particularly in the credit and financing market, Bamburi Cement boss believes that a lot is still needed if the sector is to grow to its potential.
“We believe that exemptions of taxes on all products related to affordable housing and also a review of power cost will improve the sector,” says Hassani who revealed during the interview that engagements with relevant government agencies such as the National Treasury and Kenya Revenue Authority (KRA) as well as utility firms were on going to relook at the impacts of high electricity costs being passed to the likes of cement makers, steel manufactures and auto makers.
On the future of construction industry and the contributing role of cement manufactures, the zealous bike rider and sprinter who runs about four times a week and a frequent traveler (for relaxation), Hassani sees a very bright future owing to the fact that there are existing gaps in the industry that industry players could look to capitalize on.
“Well, I do not have crystal ball. Today the cement consumption in Kenya is low and therefore there is a lot of potential for growth,” adding that, “When you look at big infrastructure planning in the country, you will need highways, capacity of airports which will require cement and in turn improve tourism sector, this will eventually improve the sector and economy. I am quite confident that Kenya is a strong market and Bamburi Cement will continue to be the leading brand even in the region,” he concludes.