Displaying items by tag: East African Portland Cement Company
East African Portland Cement resumes operations
03 May 2024Kenya: East African Portland Cement (EAPCC) has recommenced operations at its Athi River cement plant after a one-month shutdown for renovations and maintenance. The plant has undergone a US$3m upgrade to expand its capacity in order to meet the increasing regional demand for cement, anticipating an annual production of 1Mt/yr within the next two years. Before the upgrade, the plant’s capacity was 310,000t/yr.
Board chairperson Richard Mbithi said critical components used in cement production processes such as filter bags and refractory bricks were replaced during the upgrade. EAPCC also refurbished its grate cooler system, enabling the company to increase its production targets.
Mbithi said “With the finalisation of the plant refurbishment and the resultant improved production and efficiency, we are confident that the company will accomplish the production and revenue targets.”
The company undertook the first phase of maintenance two years ago and it involved the replacement of the kiln shell which was completed in September 2022. This led to improved clinker and cement production and resulted in a 38% increase in revenues, according to the Star Kenya.
Kenya: East African Portland Cement (EAPCC) has closed its Athi River plant for a US$3m upgrade to boost production capacity.
Oliver Kirubai, EAPCC's managing director, said "We are doing the second phase of our machines upgrade, which is basically targeting to increase our output. Our target is that by June 2026 we should be able to produce 1Mt/yr of cement." He added "Seven local contractors are spearheading the upgrade of this plant. They will work with us during the 25-day closure of this facility." The current production capacity of the plant is 310,000t/yr.
EAPCC recorded a loss of US$9.8m for the financial year ending June 2023, despite making a profit of US$4m in the previous year. This shift was due to increased costs elevating the firm's cost of sales to US$29.4m from US$29.9m, despite a 37% increase in revenues to US$21.9m from US$15.9 in the previous year.
Kenya: East African Portland Cement Company (EAPCC) has announced plans to build a new clinker plant in Kajaido. The Nation newspaper has reported that it will cost US$200m to build. EAPCC plans to use local pozzolana, along with limestone and coral transported from Kenya’s Coast Province, in cement production at the plant. The producer says that it will clarify the timeframes of the project in 2024.
Kenya: East African Portland Cement Company (EAPCC) plans to sell land in Machakos County close to its Athi River plant, KBC News has reported. During the sale, offers submitted by people currently residing on the land will have priority. Demolition of illegal homes on the land is currently underway.
Kenya: East African Portland Cement Company (EAPCC) has won a legal dispute for the right to evict squatters from 1740 hectares of limestone-bearing land in Machakos County. Nation News has reported that the court struck out the case after claimants failed to produce requested documents. It also ordered the claimants to pay EAPCC’s legal costs.
East African Portland Cement Company to resume full-scale operations at Athi River cement plant
01 August 2023Kenya: East African Portland Cement Company (EAPCC) says that it is ready to resume full-scale cement production at its 600,000t/yr Athi River cement plant. The Standard newspaper has reported that the plant is currently operating at 50% capacity, following refurbishment. EAPCC replaced a 16m-long section of kiln shell in the plant's clinker line, at a cost of US$3.5m. Managing director Oliver Kirubai said that the company raised the funds through the sale of land located in Athi River.
Kirubai said "Our employees have cut back a lot, in a situation where we have been struggling even to pay their salaries. We are now back on our feet." He added "A number of companies owed us millions of Shillings. They have been ordered to pay us by the government. If they honour the agreement, the problem we are facing will be a thing of the past.”
EAPCC says that it expects the scale-up of production at the Athi River plant to help lower the cost of cement for its customers.
Kenya: The government says that it has found a 'strategic investor' to buy a 30% stake in East African Portland Cement Company (EAPCC). Business Daily News has reported that the buyer will acquire shares from the National Treasury, the National Social Security Fund (NSSF) and Lafarge South Africa. The government holds 25% of EAPCC's shares through the Treasury, while the NSSF holds 27% and Lafarge South Africa 42%.
Lafarge South Africa denied that it plans to sell any of its shares in EAPCC. Chief executive officer Geoffrey Ndugwa said "We are not aware that we will be ceding shares.”
The government said that shareholders currently face the decision to sell EAPCC's land, seek a bailout from the Treasury or liquidate the company. It expects shareholders to reach a decision and establish a comprehensive plan for the company by 17 August 2023.
Kenya: A court has authorised an auction of East Africa Portland Cement Company (EAPCC)'s moveable property to proceed, in order to pay former staff. The Nation newspaper has reported that EAPCC owes the employees US$10m in unpaid wages. The court allowed the auction in favour of 60 claimants. It instructed a further 150 claimants to seek redress by other means, due to insufficient available proceeds from the sale.
Kenya: A court has prevented the takeover of a US$47.8m parcel of land belonging to East African Portland Cement Company (EAPCC) by the government. The court found that the government had not followed proper consultation processes. The East African newspaper has reported that the government had already concluded a deal with China and Oman-based investors for affordable property developments on the land.
EAPCC says that it now plans to use the site to build its own green smart city. The cement producer says that this will help to diversify its income streams.
Update on Kenya, March 2023
08 March 2023National Cement is preparing to open its new integrated West Pokot plant in September 2023. Readers may recall that the long-running project was taken over by Devki Group from Cemtech and Sanghi Industries after the Competition Authority of Kenya (CAK) gave it permission to do so in 2019. The original feasibility report by the Kerio Valley Development Authority dates back to 2010. The new plant will have a production capacity of 2.5Mt/yr.
However, this isn’t the only new clinker production capacity that Devki Group, which sells cement under the Simba Cement brand, is preparing to commission. Local media also reports that the company is also preparing to restart the former Athi River Mining Cement integrated plant at Bondora in Kaloleni, Kilifi County. After five months of trial runs the unit should be ready for full operation from April 2023. Devki Group also picked up this plant in 2019 following the long breakup of ARM Cement, after the latter producer entered financial administration back in mid-2018.
Devki Group started out in the steel sector but it has been steadily carving out a presence in the cement industry. The group opened its first cement grinding plant in 2013 and then built a 1.95Mt/yr integrated plant in Kajiado County, south of Nairobi, in 2018. Once the West Pokot plant is commissioned, the company will reportedly have a clinker production capacity of 7.5Mt/yr from three plants.
This kind of growth is making waves in the local cement sector. Since Global Cement Weekly covered the situation in September 2022 (GCW576), an argument has been brewing in Kenya over whether the country should import clinker or manufacture more of its own. This has moved to lobbying the government on whether the duty on imports of clinker should rise from 10% to 25%. Unsurprisingly, the country’s largest clinker producer, National Cement, even before the new plants are operational, has been a major advocate for putting up the import tariff. This carried over into 2023, when local press revealed the minutes of a meeting between the State Department of Industry and the Kenya Association of Manufacturers (KAM), with input from the cement producers. Rai Cement, Bamburi Cement, Savannah Cement, Ndovu Cement and Riftcot were all against raising the tariff, saying that it would enable the largest clinker producers, National Cement and Mombasa Cement, to dominate the market. However, unlike the last such meeting, Mombasa Cement was said to be non-committal on the proposal to increase the duty. Despite the disagreement over the tariff, all of the cement companies imported clinker in 2021.
Graph 1: Rolling annual cement production in Kenya, 2019 - October 2022. Source: Kenya National Bureau of Statistics (KNBS).
Rolling annual cement production in Kenya peaked at just over 10Mt in May and June 2022. Data from the Kenya National Bureau of Statistics (KNBS) shows that monthly production started to fall on a year-on-year basis from July 2022. This is likely to be connected to the elections that took place in August 2022, although wider economic trends such as inflation and high input material prices may not have helped either. Despite this, cement production rose by 5% year-on-year to 8.02Mt in the first 10 months of 2022 from 7.65Mt in the same period in 2021.
Other recent news of note in Kenya includes the restart of clinker production at East African Portland Cement’s (EAPC) Athi River Plant in mid-2022. The upgrade was conducted as part of a general five-year upgrade and expansion campaign by the company. The next steps were announced in January 2023 with a stated intention to consider entering markets in the Democratic Republic of Congo and Rwanda. The other story of note was in December 2022, when China-based Sinoma International Engineering announced that it had signed a deal with Savannah Cement to build a new 8000t/day clinker production line with a 2400t/day cement grinding unit, a 35MW captive power unit and a 13MW waste heat recovery unit. As is standard for Sinoma’s new contract releases, it said that the contract would become active once an “advance payment guarantee” had been received. Later in December 2022 the Kenya High Court intervened to stop two creditors from seizing assets from Savannah Cement and putting it into administration, although the court did acknowledge the company’s debts and a loan repayment default. In January 2023 Mauritius-based Barak Asset Recovery, another related creditor, was approved by the competition regulator to buy a majority stake in Savannah Cement. The current state of that new production line is unknown.
As the two stories above show, it is not just National Cement that is trying to move towards increased clinker production in Kenya. The whole situation is reminiscent of the time before Nigeria declared itself self-sufficient in cement in the early 2010s. Local producers became prominent and the market battle between producers and importers became public. Kenya’s range of different cement companies seem to be more diverse than Nigeria’s were, but a similar type of national interest argument may be rolled out by one side. The other parallel to note with Nigeria is that Dangote Cement is said to have attempted to buy National Cement previously and has also been trying to build its own plant in the country since the mid-2010s. Kenya’s demographics and location make it a prime place for this kind of producer-importer tussle. Let’s wait and see how much the situation has changed when the new plants open over the next six months.