Response strategies to environmental challenges by firms in the cement industry in Kenya

Abstract

One measure of a country's state of development is the per capita consumption of cement of the population; which currently is low in Kenya compared to other countries like South Africa and Egypt. Cement forms the critical base for infrastructural development for putting up residential housing, commercial buildings, roads, other facilities like water and sanitation systems, ports, airports among others. Its application is very wide thus it has high positive multiplier effect on the rest of the economy; and therefore it stimulates and enhances the economic development of the country. Thus the environmental challenges facing the industry and responses taken to address them formed the focus of this study. From late 1980s to 2002, the economic growth in Kenya went down and together with that the cement industry stagnated as the demand for cement went down too, leading to idle capacity in the cement firms. Major economic activities such as building and road construction slowed down due to less allocation of funds for this sector, coupled with corruption leading to withdrawal of donor funding. Besides, the quality of facilities such as roads put up and the existing ones went down and contributed to the overall cost of doing business in this country. With a new government in place in 2003, the industry begun to pick up, and with growth in economy, the demand for cement grew faster than the industry could cope up with. Hence this study looked at the economic, political & legal, social, technological, ecological and demographic challenges facing the industry as well as the responses taken to mitigate them. To unravel challenges and responses, the research methodology involved the use of survey approach with the help of an interview guide, was applied to gather primary data from key senior and middle management of the two cement firms under study. The key findings of the study included high cost of production due to expensive and inadequate electric ,imported coal, high taxation, high transport charges due to poor roads and poor rail network, inadequate investments in the industry among others. Both strategic and operational planning has been applied to tackle the challenges faced in order to forge ahead. Strategically, ARM and EAPC are implementing various plans such as internal capacity expansions, local and regional expansions, developing special products, more and active participation in social responsibilities, lobbying the government for better reforms in the industry among others. Operationally, major departmental functions are being enhanced by putting up proper systems, adequate manpower, increased financial budgets and planning to cater for the increased activities in line with the growing volume of business in the industry. At policy level, EACPA (Kenya Chapter) should engage the Government harder for support to address some of the challenges that are beyond the scope of the cement firms.