East African Portland Cement has issued a profit warning indicating that its 2019 full-year earnings will be 25 per cent lower compared to the same period in 2018. The company which is crumbling under KSh10.8 billion debt has blamed a sluggish market,
EAPC’s chairman, Edwin Kinyua, informed the Standard newspaper that the company is currently running at 50 per cent capacity due to financial challenges. As a result, its operations are unsustainable in the long run. “At the moment, the company is on its knees, but there is hope if the systems are streamlined,” said Mr Kinyua.
EAPC has embarked on staff layoffs in an effort to reduce operating costs. Additionally, it is in talks with the ministry of industrialization for a 15 billion shillings bailout from the government.
Cement producers in East Africa have encountered stiff competition from international firms such as Nigeria’s Dangote Cement resulting in lower sales volumes than previous years. Additionally, high energy costs and tough regulations have negatively affected the manufacturers. EAPC’s rivals Bamburi Cement and Athi River Mining have also registered huge drops in earnings in the past financial year.