Cement maker East African Portland wants to acquire strategic limestone reserves in Kitui and Kajiado and restructure its finances to remain profitable, management said yesterday.
The company whose earnings for the last financial year were largely boosted by land sale to government for the Standard Gauge Railway and unrealised gain on reevaluation of investment property has been facing stiff competition in the market leading to lower revenues.
EAPCC managing director Kephar Tande said the company will acquire strategic limestone reserves in Kitui and Kajiado for its operations.
“Ongoing efforts on innovation and product diversification will see the full commercialisation of the precast manufacturing plant, thereby introducing new products to the company’s product portfolio in order to increase revenue base," he added.
An over 300 per cent rise in the value of land owned by EAPCC in Athi River boosted its compensation payout from the government last year, for acquired railway land.
At its annual general meeting held yesterday in Athi River, the management told shareholders that the Sh836 million compensation pay it got for the compulsory acquisition of part of its land earmarked for SGR, was due to a major rise in the value of that property.
EAPCC's two parcels of land in Athi River were valued at Sh9.4 billion up from Sh2.25 billion of the previous year - a whooping 317.8 per cent appreciation.
The hefty pay coupled with an unrealised gain on revaluation of investment property, amounting to Sh7.2 billion, boosted the firm's profit before tax for the full year ended June 30, 2015 to Sh7.3 billion. The earnings were further boosted by forex gains of Sh175 millions on its hedged Japanese yen loan.
The management of EAPCC, whose revenues have been declining, told shareholders that it is exploring ways of restructuring the company's finances as part of long-term strategy for growth.
“The company has completed several projects that are expected to impact positively on the performance going forward,” chairman Bill Lay told investors at the firm's 83rd annual general meeting held in Athi River yesterday.
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