East African Portland Cement Company (EAPCC) has defaulted on a KSh263 Million loan it took from KCB Bank, prompting the lender to recall the credit facilities, reports PricewaterhouseCoopers (PwC).
This latest PwC report relates to an audit of the cement manufacturer’s accounts for the year ended June 2019.
In the year under review, the entity defaulted on the contractual loan repayments to KCB Bank, totalling KSh263Million, prompting the lender to issue a demand notice dated 8 April 2019 for all its facilities.PwC Report
EAPCC made a pre-tax loss of KSh2.8 billion in the year ended June, according to the report. Sales in the review period dropped 45% to KSh 2.8billion.
“The throughput in the period was approximately 300,000 tonnes, against the plant capacity of 1.3 metric tonnes, pointing to the severe underutilisation of the plant, which translated to low revenues,” said PwC.
The firm, which is majority state-owned, has seen its fortunes head south due to what observers say is a dilapidated plant and machinery and high staffing costs.
Figures indicate that in the financial year ending 2018, the firm’s turnover declined to KSh5.2 billion from KSh6.9 billion the previous year. Operating loss increased from KSh1.3 billion to KSh3.6 billion while pre-tax profit increased from a negative KSh1.7 billion to a positive KSh6.96 billion.
Established in 1933, EAPCC is the pioneer cement company in Kenya. It initially imported cement until 1956 when it started its first manufacturing plant in Athi River.
EAPCC is considered the third largest cement company in Kenya, controlling about 15.1 per cent of the total market share and an annual production capacity of more than 1.3 million tonnes.
The company has been occupying the third spot after Bamburi Cement until two years ago when boardroom wrangles over the firm’s ownership begun to drive its fortunes down.