The government is in talks with potential investors to invest in the cash-crunch East Africa Portland Cement Company in an effort to turn it around.
Industrialization CS, Peter Munya, “total mismanagement at the government parastatal” by past and current managers are to blame in bringing down the company.
Speaking at the company’s Kibini plant in Sultan Hamud, Kajiado County on Monday evening, Munya said the giant cement manufacturer which requires a bailout of Sh15billion has the potential to stand on its feet again.
The CS said the government has already put strategies in place to revive the company that is already operating on losses.
He said selling part of the company land which is in Athi River is not sufficient to generate the money required, and that potential investors being sought can help aid in bailing out the company.
CS Munya said the aspired turnaround for the company must involve vetted leadership and governance, adding that its management has totally failed due to massive corruption.
Munya spoke as the company’s MD, Peter Nkeri, was on February 28 sent on compulsory leave, and his placed filled by Stephen Nthei on an acting capacity.
The excess workforce has been a major challenge to the company that has been grappling with ballooned wages amounting to close to Sh200 million a month.
Recently the company laid off more than 620 workers who are currently demanding their retrenchment dues amounting to Sh1.5 billion.
Munya, who toured the company’s Kibini plant along with Nominated Senator Judy Pareno and MP Peris Tobiko, said the company will invest in modernization of the factory to increase productivity and improve efficiency.
“The government is very keen on reviving EAPCC and we have already carried out due diligence on the existing loopholes has led it to make losses. Mismanagement has killed the company. We are restructuring management wholesomely to ensure accountability of the funds invested to revive the company,” said Munya.
EAPCC chairman Edwin Kinyua, who also accompanied the CS, said the company has a significant economic impact but lamented it is currently operating at half of its maximum production.
Kinyua noted that for the last six months the company lost Sh1.4 billion at an average loss of Sh7.6 million per day.
He said in 2018 the company’s cement production cost stood at Sh5.3 billion with sales generating Sh5.2 billion with the cost of labour standing at Sh4.1billion.
“At the moment the company is on its knees but there is hope of raising it from the ashes if the systems are streamlined,” added Kinyua.
Kinyua who was appointed as the company chairman 4 months ago expressed confidence that the bailout will turn around the company.
He said creditors owed billions of money by the company have seen the turnaround strategy’s viability and have stopped effecting court orders to auction the company’s property.
Kenya Commercial Bank is the largest creditor owned Sh4.8 billion by the company.
The government has already sold 900 acres of the company’s 16,000 acres of land to Kenya railways at a tune of Sh5.2 billion to put up an inland port at Athi River area and already payment of Sh1.2 billion has been paid to EAPCC.