Displaying items by tag: Kenya
Losses mount at ARM Cement in 2017
04 June 2018Kenya: ARM Cement’s net loss more than doubled to US$55m in 2017 due to poor demand in Kenya and Tanzania. Its sales fell by 32% year-on-year to US$85m from US$127m. Elections in Kenya reduced cement demand, a coal import ban in Tanzania caused production issues at its Tanga cement plant and both countries saw increased competition.
“2017 was the most challenging for the group since the company’s listing on the Nairobi Securities Exchange in 1997. Whilst the management has navigated many business difficulties well in the past, raised capital for expansion, increased net profits and market capitalisation continuously over a 14 year period up to 2015, the challenges of the past year have been unprecedented,” the company said in a statement.
The cement producer says it is undergoing a ‘significant’ review of its current operations, asset base and financing structure to address its problems. It has also been cutting staff benefits as part of its plan to save money.
UK-government investor CDC Group, which holds a 41% stake in the company, has also replaced its board members Ketso Gordhan and Pepe Meijer with Sofia Bianchi and Rohit Anand.
ARM Cement cuts staff benefits to save money
23 May 2018Kenya: ARM Cement has cut its staff pension plan and medical insurance scheme due to cash flow problems. The staff schemes have been suspended from the end of June 2018 until further notice, according to the Business Daily newspaper. The suspension of the two benefits follows erratic salary payments and failure to pay pension contributions since June 2017. The cement producer has attempted to raise funds from asset sales and find a strategic investor. Its executive director Rick Ashley resigned in early May 2018 citing personal reasons.
Uganda: Local cement producers are facing challenges meeting the specification required for cement being used by the Standard Gauge Railway (SGR) project. Project coordinator Kasingye Kyamugambi said at a procurement conference in Kampala that the project was facing issues with cement, reinforcement steel and sand, according to the Daily Monitor newspaper. Hima Cement is producing one specific product for the project following discussions with the SGR. However, the railway needs eight different types of cement.
Kyamugambi has called for legal cover for the infrastructure project to bypass local product sourcing laws. He has asked that new legislation be introduced to cover projects with a lifecycle of over a century.
The SGR is being built by China’s China Harbour Engineering Company. The project is intended to link up to Kenya’s railway project at Tororo with proposed links to Rwanda and South Sudan. The Democratic Republic of Congo has also expressed interested in the line.
Kenya: Cement consumption has fallen for the first time since 2000. It fell by 8.2% year-on-year to 6.2Mt in 2017 from 6.7Mt in 2016, according to data from the Kenya National Bureau of Statistics reported on by the Daily Nation newspaper. Reduced demand for building materials in the construction sector occurred at the same time as a fall in the value of building plans approved in 2017.
Kenya: East African Portland Cement (EAPC) is relying on a US$100m land sale to the government to remain solvent. The company is in discussions to sell over 14,000 acres of land to the newly established Special Economy Zones Authority funds, according to the East African newspaper. The cement producer has seen its production halted, cement stocks depleted and staff salaries delayed over the last two months. It reported a loss of US$9.58m in the second half of 2017 from a loss of US$2.45m in the same period in 2016.
Kenya: East African Portland Cement plans to build a railway terminal at Athi River near its integrated cement plant. The depot will be used to help deliver raw materials by train on the Standard Gauge Railway to the plant, according to the Business Daily newspaper. Managing director Simon Peter ole Nkeri said that his company relies ‘heavily’ on imported clinker. The cement producer is holding discussions with the government about the project.
Kenya: The International Finance Corporation (IFC) has committed US$96m to invest in National Cement towards upgrading a cement plant and building new grinding plants. National Cement’s chairman and chief shareholder Narendra Raval is also expected to invest US$102m into the expansion project, according to the Daily Nation newspaper. The company intends to build two grinding plants in Kenya and Uganda and a new 5500t/day clinker production line at its existing integrated plant in Merrueshi in Kenya. It also plans to build a 8MW captive power plant at Merrueshi.
Kenya: Bamburi Cement’s turnover fell by 6% year-on-year to US$357m in 2017 from US$380m in 2016. The subsidiary of LafargeHolcim attributed the decline to poor weather, a prolonged election period and lower construction activity, especially in the individual home builder segment, in Kenya. In Uganda it described the market as ‘broadly flat’ for both domestic and export sectors. The cement producer’s profit fell by 66.5% to US$19.6m from US$58.4m.
Chairman John Simba said, “While the 2017 results reflect a mixed performance in a challenging market environment, we remain positive that the market conditions in both countries will continually improve and rebound in line with the projected growth in both domestic and regional markets. The expected commissioning of the new capacity in the second half of 2018 will see the business enhance its market leadership position and underscores our belief in the growth of East African economies, underpinned by a robust construction industry.”
Kenya: East African Portland Cement’s loss grew to US$9.58m in the second half of 2017 from US$2.45m in the same period in 2016. Its sales revenue fell by 17% year-on-year to US$30.2m from US$36.6m, according to the Standard newspaper. It has blamed the falling sales on ‘prolonged’ political unrest connected to the two elections the country held in 2017.
East AfricanPortland Cement gains ISO certification
26 February 2018Kenya: East Africa Portland Cement has gained re-certification for ISO 14001 on environmental management system, and OHSAS 18001 for occupational health and safety. Company official Simon Peter ole Nkeri said that the achievement was part of the company’s around strategy, according to the Business Daily newspaper. He added that the adoption of an environmental quality management system was a strategic decision to improve the company’s performance.