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EAPCC in Financial Stress, Requires Sh15 Billion Bailout So As To Move On

East African Portland Cement Company Ltd, is suffocating financially and can’t move on any further, its board announced officially on Friday.

In an impromptu meeting with local journalists, the board under the session’s chairmanship of Kung’u Gatabaki and other members said the company has no more capacity to redeem itself.

Gatabakaki, who represents the interests of Lafarge that owns Bamburi Cement Company at Portland, in a surprise statement said for the company to move out of the woods it will require a kick-start of between Sh10 billion  – Sh15 billion to make it viable again.

The situation at government cement parastatal is financially messed up and nothing financially tangible is going on there.

Other members of the board present in the impromptu meeting called at the company’s plant offices in Athi River town included; EAPCC MD, Peter ole Nkeri, company head human resources Rose Karanja, Humphrey Muhu representing CS Treasury, Charles Mulunda represented PS Trade, head of production operations EAPCC Timothy Ruhiu.

READ:https://kajiado.co.ke/2018/08/22/eapcc-jobs-saga-not-yet-declare-two-kajiado-nominated-senators/

Journalists had arrived at the company premises to cover Industrialisation and Enterprise Development PS Peter Munya, who called off his tour in a huff to attend to other international issues.

Gatabaki explained that cement companies in the country are facing hard economic times and situation at the EAPCC had been aggravated by management issues dating back 10 years ago.

“We have issues that date back to 10 years back which have refused to let us go. They board on bad policies in the management of the company and interference by politicians in the recruitment of staff,” said Gatabaki, who said was picked by PS Munya to chair the board session with journalists.

He went on; “We are in the woods, and cannot make any money to sustain a bloated workforce in this company and the only way out is resuscitation money to keep this company on its knees again.”

The board said its hands are tied and cannot do anything outside the laid down mandate in running the company, and therefore was only forced to make recommendation to the cabinet on how the company can be raised from its current status.

Revealing the content delivered to the cabinet for consideration, Gatabaki said, they recommended to it the sale of a fraction of EAPCC land asset that stands at 16, 000 acres of land that fall under 26 parcels.

In Athi River alone, the company boasts of a prime land ranging beyond 7, 000 acres.

Nkeri said the company was paid Sh836 million in 2014 by the standard gauge railway for compulsory acquisition of its land at Athi River.

READ:https://kajiado.co.ke/2018/07/19/eapcc-manager-says-company-land-title-intact-despite-encroachments/

“We have all our land titles intact in the bank. They are under lock and key and those claiming share of Portland land assets need to understand this,” said NKeri.

He said the company’s staff trade union won a court case out of collective bargain agreement in 2014 and were awarded Sh1.4 billion, and requires to be paid.

“We have a KCB loan acquired in 1978 and now stand at Sh4.5 billion. The company also owes Japanese International Corporation Agency a debt of Sh1.5 billion which was borrowed 18 years ago,” Nkeri said.

The MD said other creditors owe the bank Sh3.5 billion and require to be paid, while refurbishment of the Athi River company plant requires not less than Sh2 billion to change equipment.

He said that for the company to kick off from its current status, it requires to buy coal which is procured at US$185 per ton while the plant requires 8, 000 tons per month.

“The company also require supplementation of its clinker production, and that means more money,” he said.

READ: https://kajiado.co.ke/2018/06/24/re-employ-sacked-kajiado-maasai-close-shop-good-mcas-warn-eapcc/

The board said the decision to sell part of the company’s assets has to be approved by the government which has more than 51 per cent shares.

Kajiado politicians are up in arms over a decision the company took to retrench some of its workers, and have accused the current MD of “bad under deals” in the government parastatal.

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