Portland Cement targets clinker market to boost profits

The cash-strapped East African Portland Cement Company (EAPCC) is banking on the local clinker market and selling its multi-billion shilling land at Mavoko in Machakos County to turn around its fortunes.

The company's board chairman, Brigadier (Rtd) Richard Mbithi, says they are working to ensure that the giant state-owned cement processor roars back to life.

On Thursday, the EAPCC board and management, led by the managing director, Mr Oliver Kirubai, visited the Ilbisil limestone quarries in Kajiado Central Sub-county where they commissioned a solar-powered borehole to serve the community living near the quarries.

Mr Kirubai said the company had registered a production growth of 25 per cent in 2022 with an anticipated growth of 50 per cent in the 2023/2024 financial year, targeting major road construction and the government's affordable housing project.

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"After the first phase of our plant refurbishment, we have seen significant growth, carving out a niche in the cement market both locally and within East Africa. We expect further growth this year," he said.

He further said that the 17 per cent import duty on clinker recently introduced by the Kenya Kwanza administration has opened up business opportunities for the company with high potential to produce clinker for commercial sale to other cement processors locally.

He added that EAPCC will tap into the local clinker market with the intention of setting up a second multi-million clinker plant to maximise profits.

EAPCC resumed full clinker production in September 2022 after investing Sh500 million to upgrade its Athi River plant, whose frequent breakdowns had affected the supply of its products to the market.

"The national government has over the years demonstrated its commitment to resuscitate the sleeping giant. We will set up a second clinker plant that will produce 3,000 tonnes of clinker per day, which translates to 6,000 tonnes of cement per day," he clarified, saying this was in line with the implementation of the five-year strategic plan.

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Mr Kirubai was optimistic that the sale of the company's unused land in Mavoko would raise Sh45 billion to plug the working capital deficit and settle debts, including retirees' dues.

"We are going after our debtors. The sale of idle land will also provide the company with much-needed capital. We want the company to be fully operational in a few months," he added.

Board Chairman Brigadier (Rtd) Richard Mbithi said the lack of working capital had almost crippled the company.

The company, which is listed on the Nairobi Stock Exchange, has managed to reduce its negative capital from Sh14 billion in 2019 to Sh8 billion this year.

He also promised to quell the boardroom squabbles that have been witnessed in the past between the management and the board to ensure the smooth running of the company.

"Our core business is to make the factory profitable, we will work as a team to bring back the lost glory of Portland. No more boardroom wars," he said.

Mr Patrick Tutui, board director, said the company has limestone reserves in Ilbisil quarries that can last for 40 years.
"In a fraction of the land where limestone is being extracted, we boast of raw materials that can last for 40 years," he told the locals.

Recently, Trade, Industry and Investment Cabinet Secretary Moses Kuria said the government was planning to establish Kenya's first exclusive cargo city on part of the idle East African Portland Company in Athi River. He also said the ministry was seeking synergy between EAPCC and other government departments to help make it viable.