(Nairobi) – East African Portland Cement (EAPC) has contracted Danish company FLSmidth to conduct a technical audit of its Athi River facility. This audit, expected to be completed by early December, will help inform the company’s investment decisions, particularly those related to plant upgrades and capacity expansion.
In an exclusive interview, Mohamed Osman, acting managing director of EAPC, explained that the audit would assess the current technological capacity of the plant, as well as evaluate its reserves of raw materials. The findings will guide the company in planning for necessary upgrades to meet growing market demands. Osman added that the audit would also examine the potential for acquiring additional land with sufficient reserves, ensuring the plant’s long-term sustainability.
Part of the audit’s focus is also on energy efficiency, especially considering the rising costs of power. Osman noted that EAPC is exploring the adoption of more energy-efficient equipment, including alternatives to coal, such as using agricultural waste like macadamia husks. The company is looking to make these changes as part of a broader strategy to modernize the plant and reduce operational costs.
The audit process, which began several weeks ago, is scheduled to conclude in early December. The company is simultaneously working on a land sale exercise, expected to generate Sh9 billion. EAPC is selling idle land in Athi River, which has been occupied by local communities for many years. The company plans to offer the land to these communities, giving them the first opportunity to purchase it. In addition to this, EAPC is disposing of other parcels of land, which are expected to generate an additional Sh3.5 billion.
This sale is part of the company’s broader strategy to reinvest the proceeds in its plant. Osman revealed that the company plans to use some of the funds to scale up its clinker production capacity from 1,680 tonnes per day to 2,500 tonnes. Additionally, EAPC is planning to build a new integrated cement plant with a capacity of 5,000 tonnes, allowing the company to eventually produce up to 15,000 tonnes of cement per day across its two plants.
EAPC’s shares have experienced a significant rise on the Nairobi Securities Exchange (NSE), reflecting positive market sentiment. The company’s stock price has grown almost six-fold, from Sh8 at the end of 2023 to Sh45.45, making it the best-performing stock on the exchange. This increase is partly attributed to investor confidence in EAPC’s recovery and expansion plans.
Osman also highlighted the company’s success in cutting operational costs and reducing debt. EAPC has paid off Sh6.8 billion in debt to KCB and has reduced its workforce costs from Sh240 million to Sh55 million through a strategic restructuring process. These efforts are expected to contribute to better financial results in the first half of the year, signaling a positive turnaround for the cement manufacturer.
Table: Key Investment Plan Highlights
| Investment Focus | Details |
|---|---|
| Land Sale Proceeds | Sh9 billion expected from the sale of land in Athi River. |
| Clinker Production Capacity | Increase from 1,680 tonnes/day to 2,500 tonnes/day. |
| New Cement Plant Development | New integrated plant with a capacity of 5,000 tonnes/day. |
| Energy Efficiency | Exploring alternatives to coal, including agricultural waste. |
| Debt Reduction | Paid off Sh6.8 billion debt to KCB. |
| Workforce Cost Reduction | Reduced from Sh240 million to Sh55 million. |