East African Portland Cement Company (EAPCC)is seeking an approval by the cabinet to sell a Sh. 10 billion piece of land.
The funds generated from the sale of 13,000 acres in Athi River will be used to retire a Sh3.8 billion loan and revamp its ageing plant that requires nearly Sh45 billion to be brought to a level where the EAPCC can compete well with nimble rivals like Savanna Cement.
“The board is in the process of raising Sh10 billion to address the most urgent issues, top of which is the reduction of bank loans that are sapping cash flow,” said EAPCC chief executive Kephar Tande. The balance will be used to revamp the plant.
The EAPCC expects its profit to slide by more than a quarter in the financial year ending June 30 citing year-earlier gains on land sales. It reported a net loss of Sh531 million for the half-year ended December 2015 compared to an after-tax loss of Sh65.3 million a year earlier.
“The plant is aged and a number of critical elements are obsolete. Some of the cement mills are over 50 years old,” said Mr Tande.