EAPCC set for restructuring in hunt for profit

Companies

State unveils bid to turn around Portland Cement

Tuesday, March 5, 2019 21:10

By STANLEY NGOTHO

The government will restructure the troubled East Africa Portland Cement Company (EAPCC) #ticker:PORT in a bid to steer it into profitability, a Cabinet secretary has said.

Industry and Trade minister Peter Munya said poor management at the cement maker over the years is to blame for the bad performance.

“The company that used to be a household name in the construction industry is dead. The government at Cabinet level has reached a decision to turn it around.

“The company has been operating on negative working capital for years making it hard to withstand the stiff competition.

“Structures and policies are already in place to make it more vibrant once again,” he said on Monday.

Mr Munya spoke during a visit to Portland’s Kibini quarry in Kajiado East, which has been the biggest source of raw material for the firm but whose access locals recently blocked, halting its operations.

The cement maker’s board sent managing director Simon Nkeri on leave days after receiving Sh1.2 billion from Kenya Railways in a deal to dispose of part of its land.

The firm plans to use a portion of the funds to ensure a steady supply of raw material and to settle dues owed to staff laid off last year.

The company’s long-serving head of finance Peter Nthei replaced Mr Nkeri in an acting capacity.

Portland board chairman Edwin Kinyua said the firm had been performing poorly and incurred massive debts. According to the board report, the cement manufacturer has been making a loss of Sh7.6 million daily.

In 2018, Portland sold cement worth Sh5.7 billion against an expenditure of Sh5.8 billion with the firm projecting losses in the 2019 financial year.

“The company management is negotiating with big lenders like Kenya Commercial Bank the modalities of paying the loans to give the company a chance to turn around.

“The human capital will be reviewed to downsize the cost of production. We will be moving in earnest to upgrade the factory’s ancient machines to increase production by 40 percent,” said Mr Kinyua.