Displaying items by tag: EAPCC

Kenya: East Africa Portland Cement Co (EAPCC) boss Kephar Tande has said that the government is set to build a second cement factory in Kajiado, Athi River State.

Tande said that plans are underway for the construction of a fully-fledged cement factory in the Nooleleshuani area of Kajiado and is expected to be in operation in 2016. He said that the site is next to the limestone-rich Maasai plains, which are the major source of cement raw materials in Kajiado county that are supplied to all of the five companies based in Athi River.

"This will ensure its position in the Kenyan market remains strong and help it to eventually acquire leadership. We are currently carrying out feasibility studies for a clinker plant in Nooleleshuani near Bisil and will install a new cement mill by 2016 to increase our cement production capacity to 2Mt/yr," said Tande.

The EAPCC announcement to build a new cement plant comes a few days after cement makers increased cement prices in the wake of a new mining levy imposed by the Ministry of Mining.

Kenya: The East African Portland Cement Company (EAPCC) has adjusted its previous financial reports following the discovery of a theft of cement worth US$2m. The fraud led to the under-declaration of its overdraft by US$1.4m for cement lost in 2012, with the firm also overstating its sales and VAT payments by the same amount.

"The company lost cement worth US$1.4m and US$0.66m during the years ending 30 June 2012 and 30 June 2013 respectively through fraud, which was discovered in 2013," the EAPCC said in its latest annual report.

"The financial statements have been restated to correct these misstatements."

The Treasury and the National Social Security Fund (NSSF), which have a combined stake of 52% in the EAPCC, have questioned the accuracy of the EAPCC's accounts, which are examined by the National Audit Office and its agent Ernst & Young. The EAPCC management has disputed this claim.

In 2013, EAPCC suspended seven of its employees who were charged with allegedly stealing cement worth US$2m.

Kenya: ARM Cement is set to build Kenya's largest cement plant in Kitui County, setting it up for a fight with Nigeria's Dangote Cement, which also has plans to open a U$400m plant in the same region.

ARM says that it will raise up to US$300m to fund new plants including the planned unit in Kitui, which will produce 8000t/day (~2.5Mt/yr) of cement. This will make it the single largest cement factory in the country and places the unit ahead of the planned Dangote plant, which has a planned daily capacity of 5500t/day (~1.8Mt/yr). ARM's fund-raising will be done through a mixture of bank loans, corporate bonds and rights issues.

"We plan to start construction of the Kitui plant late in 2014. It is a major development for us," said Pradeep Paunrana, ARM's chief executive, to the Daily Press.

This announcement will re-open the fight for Kitui mines, which were the subject of a fierce court battle between ARM and Bamburi Cement in 2010. The 100km² area is rich with high-quality limestone. The East Africa Portland Cement Company (EAPCC) has also directed its management to strike a deal with Kitui County so that it can secure key raw materials and counter moves made by Dangote and local rivals.

Kenya produced 4.7Mt of cement in 2012, up from 2.8Mt in 2008, according to the Kenya National Bureau of Statistics. With double-digit cement market growth expected in the coming years, Kenya has caught the eye of Dangote Cement and new entrants National Cement and Mombasa Cement as well as the established players.

Kenya: The Ministry of Industrialisation and Enterprise Development has recommended that the East African Portland Cement (EAPCC) directors be investigated over a chaotic annual general meeting held on 17 December 2013.

Wilson Songa, principal secretary of the Ministry of Industrialisation and Enterprise Development, said that the conduct of EAPCC chairman and board members, including chief executive Kepha Tande and directors Titus Naikuni and Hamish Keith and company secretary J Maonga should be investigated in relation to the AGM.

Songa argued that the AGM should be declared a sham and the company was directed by the CMA not to affect any of the resolutions passed at the meeting. Songa wants the CMA to order EAPCC to reconvene the AGM and an independent person nominated by the capital markets regulator to oversee the meeting. Songa also wants the CMA to confirm that the nomination and election of Didier Tresarrieu as a director was null and void since it was not carried out in accordance with articles of the company.

The current stand-off re-ignites a long-running battle for the control of the cement maker between the government and France's Lafarge. The Treasury holds a 25% stake in EAPCC while NSSF holds 27% shareholding. This gives the government a 52% stake in the company, which has seen it ranked as a state corporation.

Kenya: The East African Portland Cement Company (EAPCC) has reported a net profit of US$28m for its financial year that ended on 30 June 2013. In the previous year the company reported a loss of US$11m. Revenue grew by 8% year-on-year to US$108bn. The improvement was attributed to improved sales and cost cutting.

"The results were lifted partly by a tax credit of US$4.2m and a US$8.4m net gain from revaluation of free hold property," said EAPCC Managing Director Kephar Tande. He added that turnover grew while the cost of sales fell due to cost management and a rationalisation of operational activities. Speaking generally, Tande said that the EAPCC is relying on increased infrastructure projects in Kenya to lift demand and it has appealed to the government to remove duty exemption on imported cement meant for government projects.

In the current financial year to 30 June 2014 the EAPCC plans to invest US$5.9m on plant and equipment upgrades. Overall the cement producer intends to spend up to US$32m until 2015 on building a new packing line, acquisition of new clinker and grinding capacity and the creation of a new line of pre-cast concrete products.

Kenya: The East African Portland Cement Company (EAPCC) has asked the Kenyan government to renew the term of its CEO, Kephar Tande, whose current three year term is set to end in October 2013. Tande's re-appointment presents a test to the new Kenyan government, elected in March 2013, which may follow its predecessors and attempt to influence the composition of the cement producer's management board.

"The board is satisfied with Tande's work and we have asked the Cabinet secretary to offer him another term," said the chairman of EAPCC, Mark ole Karbolo, in an interview with Kenyan newspaper Business Daily. He added that the EAPCC will announce a profit of nearly US$12m for the year ending June 2013.

In 2012 the government unsuccessfully attempted to oust eight EAPCC directors including the chief executive, accusing them of poor governance. The directors, including Karbolo, Kenya Airways CEO Titus Naikuni and lawyer Hamish Keith, moved to court to block the move following the state's directive to disband the cement maker's board. The court reinstated them in a legal battle that also saw former President Kibaki's appointment of Karbolo's replacement revoked.

Kenya: The East Africa Portland Cement Company (EAPCC) plans to expand after returning to profit during the six months ending 31 December 2012. The company said that it was boosted by cost reduction and improved cement sales. EAPCC, Kenya's third largest cement producer, said that it was optimistic of strong full-year results and was exploring expansion into Tanzania. The company already operates in Uganda and South Sudan.

"We are now discussing the financing of these (new) projects," EAPCC's managing director Kephar Tande told investors in Nairobi. The company plans to raise new capital through the Nairobi bourse, with the aim of increasing clinker production to 1.5Mt/yr by 2016 from 0.45Mt/yr at present. Tande also expects EAPCC to double its exports (as a proportion of total production) to 10% by 2014.

EAPCC made a pretax profit of US$4.3m during the six months ending 31 December 2012, compared with a pretax loss of US$2.82m during the same period of 2011. Tande said the business boosted profits by saving about US$9.7m through increased efficiency.

This news is in stark contrast to EAPCC's 2012, which was blighted by boardroom disagreements, strikes, sackings, protests and even a shooting at the plant.

However bad the multinational cement financial reports get as they tighten their operations remember that it could be worse. For example, they could face the challenges the East African Portland Cement Company (EAPCC) has confronted over the last year. Reuters broke the news this week that EAPCC had widened its loss to US$9.96m due to poor sales, a major plant breakdown and labour unrest. All of this occurred in a construction economy demanding ever more cement.

EAPCC has seemed surrounded by controversy over the last year starting with a conflict of interest issue raised over a change in clinker supply in December 2011. This then led to the removal of the company's directors by the Kenyan government, which in turn led to a strike. In the chaos a worker was shot and wounded. On top of that the report reveals that there was a 'major' breakdown in one of the plant's kilns. It's a wonder that EAPCC didn't make a greater loss in the 2011-2012 year.

Demand for cement in Kenya and in the other countries in the east African region is growing. Data from the Kenya National Bureau of Statistics in December 2011 showed that cement consumption in Kenya rose by 12% in the nine months to September 2011. As reported last week in GCW72, ARM Cement (formerly known as Athi River Mining Ltd) reported a net profit of US$9.71m for the first nine months of 2012. This marks a 328% growth in profit compared to the same period in 2011 when it made US$2.26m. Meanwhile this week it was announced that Ethiopia is about to open its second cement plant in the town of Dire Dawa. More plants are on the way. Over in Tanzania, the Tanzania Investment Centre (TIC) announced that the country's cement deficit surpassed 1Mt since 2011.

As has happened elsewhere in Africa, notably in Nigeria and South Africa, local producers are pushing hard to restrict foreign imports as they grow their own capacity. In September 2012 the East Africa Cement Producers Association (EACPA) made warnings on the issue. The chairman of EACPA at the time was none other than the managing director of the EAPCC. In addition potential investors should take note that Kenya will hold its next general election in March 2013. Over 1000 people died in the protests following the 2007 election as well as the displacement of over 500,000 people.

Given this growth in protectionism, international producers who want to expand are being forced to seek riskier territories. Pakistan's Lucky Cement, a major importer of cement to Africa, is doing exactly this. It announced this week that it is entering into joint ventures in plants in DR Congo and Iraq. However these projects perform, Lucky Cement must be praying that they don't end up looking like the last year that EAPCC has endured.

Kenya: East African Portland Cement (EAPCC) has reported a loss of US$9.96m for the year ending 30 June 2012, compared to a loss of US$1.40m in 2011. EAPCC saw its revenue drop by 15% to US$101m in the same period. The company's takings were affected by slow sales, a major plant breakdown and labour unrest.

The company said that production was hurt by labour unrest that caused operations to be suspended in January 2012 and a major breakdown of one of its kilns that hit production. Other factors included a weakening Kenyan Shilling, and rising costs for power and raw materials. In addition slow sales affected revenue.

Kenya: The East African Portland Cement Company (EAPCC) has appointed two managers to head up its production and human resources departments. Charles Charo has will become the new head of production operations and John Ole Kimanjoi will become the head of human resources and administration.

Charo holds 25 years of experience in cement manufacturing and has previously worked for Bamburi Cement and Athi River Mining. Kimanjoi holds 25 years experience in human resources, specialising in labour relations. He has worked for KPTC, Telkom Kenya, Mumias Sugar and NSSF. Other appointments include a new Production Manager Joseph Kombo, who was promoted from process manager and James Mutisya, who becomes the new Maintenance and Projects Manager.

EAPCC managing director Kephar Tande said that the changes have been made to enable the company to execute a new strategy and align functions to grow the business.