- East African Portland Cement (EAPC) has made $8 million in the six months December 31, 2022 a 11 percent drop in losses.
- The firm attributed the loss to increased competition, depreciation of the Kenyan shilling against the US Dollar and increased energy costs which countered gains from plant efficiencies and cost containment measures.
- The firm however registered a $5 million increase in revenues do to improvement in cement production owing to the completion of the first phase of the plant refurbishment completed in September, 2022.
East African Portland Cement (EAPC) has made $8 million loss in the six months December 31, 2022 a 11 percent drop in losses compared to $9 million loss recorded in the same period in 2021.
The firm attributed the loss to increased competition, depreciation of the Kenyan shilling against the US Dollar and increased energy costs which countered gains from plant efficiencies and cost containment measures.
The firm however registered a $5 million increase in revenues due to improvement in cement production owing to the completion of the first phase of the plant refurbishment completed in September, 2022. The firm replaced a faulty kiln shell that had caused frequent down times in the process.
The upgrade saw the cement manufacturer cut out 16 metres of the dilapidated Kiln shell and replaced it with a new one at a cost of $5 million.
“Decline in finance cost which was offset by marginal increase in administration and selling owing to market regeneration led to narrowing of loss before tax of $1million,” the firm said in a statement.
Cost of sales went up to $17Mn compared to $13mn recorded in the same period in 2021, while total assets stagnated at $358Mn.
The firm says continued focus on strategic plan implementation is expected to reposition the business to deliver its customer value proposition.
“Implementation of the first phase of the Company’s five year strategic plan dubbed New Dawn continues in earnest with significant progress made on the main pillar (operational excellence, market regeneration and customer centrism , financial sustainability, people and better planet),” the firm explains.
Last Year, EAPC launched a sustainable cement product called Green Triangle Cement. The product is a new masonry cement suited for mortar works. It is produced using less clinker. It is certified under the 22.5 standard via the Kenya Bureau of Standards but the company says it has been ‘boosted’ to 28 strength for a wider range of applications. The EAPCC is currently aiming to increase its range of cements to five brands.
Trade and Investments Cabinet Secretary Moses Kuria attended the official launch for the product, promising to revive the cement manufacturer to return to its previous glory.
“Past regimes ignored the oldest cement parastatal for reasons that cannot be understood. I am going to stand with you and ensure that you start making profits,” said Kuria as reported by Kenya’s Star Newspaper.
He said the government has two major projects that will require large amounts of cement in the construction of cheap houses and the 10,000 km roads to be undertaken by the Kenya Kwanza government.
The government, he said, will work closely with its cement parastatal to ensure it meets all the demands and deadlines in the construction industry.
“I will do what I need to do as the cabinet secretary to support the EAPCC. I have talked to many partners who fall within my ministry to support this company, which is a beacon in the construction industry,” said the CS.
EAPC has suffered years of neglect from the government due to under investment leading to cash flow constraints. This made the firm cut production and lose its market share.
EAPCC is 27 percent owned by the National Social Security Fund (NSSF) and the government of Kenya through the National Treasury (25.3 percent).
Others are Bamburi Cement Ltd (12.5 percent), Associated International Cement (14.6 percent) and Cementia Holding (14.6 percent).