Portland Cement eyes Rwanda and DRC markets to increase profit margin

East African Portland Cement Factory

A section of the East African Portland Cement Company plant in Athi River on January 25, 2023.

Photo credit: Stanley Ngotho / Nation Media Group

The East African Portland Cement (EAPC) is planning to expand within the East African Community member countries following its Sh500 million plant upgrade and introduction of a new cheaper Green Triangle cement brand.

 The Athi River-based cement processor has begun the year on a high, producing its own clinker, the main material used to grind cement, following a replacement on part of its kiln shell that had been dilapidated for years causing cuts on production.

 In 2021 EAPC rolled out an ambitious five year business modernisation and expansion cycle in a bid to turn the giant cement plant into profitability.

 The firm’s CEO Oliver Kirubai told Nation the ambitious five –year strategic plan aimed to revive and turn around the plant’s fortunes has recorded an upward trajectory.

"Our ambitious new business strategy is anchored on major investments in our factory to give us a platform to produce and outgrow cement demand in East Africa. Despite the high costs of energy and an old clinker line, we have already seen steady results in the last six months from the ongoing business reorganization,” Mr Kirubai said.

 He said the company’s structuring will enable it to settle debts and be able to inject more capital as it eyes the broader East African market.

"We are at the tail end of our balance sheet restructuring and this coincides with the start of a new business period of a disciplined, performance-driven culture .We expect to outgrow the regional cement market. We are looking at going beyond Kenya into Rwanda and DRC as well,” he said adding that the company is also targeting growth in its volumes and brand portfolio.

 EAPC expects the cement production in the country to be driven by key government agenda on housing and infrastructure projects expected to hit Sh3 trillion in the next five years through funded and own projects.

“We are steadily on a new strategic business cycle dubbed New Dawn, to re-claim our market share and support Kenya’s push for infrastructure growth and affordable housing. Over the next five years, we aim to increase value to our shareholders through a concentrated focus on the Athi River plant modernisation and a rapid market growth supported by a performance driven workforce.” Said Mr Kirubai.

With the new strategy, the company is shifting away from years of public sector culture. It has injected a performance driven workforce which it hopes will accelerate growth and achieve 70 per cent mid-term growth on productivity.

The new strategy period comes against the background of ongoing cost containment drive to salvage years of corporate mismanagement and factory neglect by previous managements.

 Years of a bloated and an unsustainable work force and declining market share had sent the one-time cement giant on a cash crisis, compelling the board to start a turnaround strategy in 2019. 

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