The East African Portland Cement Company (EAPCC) plans to invest Sh30.53 billion ($200 million) in a new clinker making factory in Kajiado county in a move that will give it headroom to increase capacity and cut its production costs.
Cement making involves the mixing of clinker, a key raw material made from limestone or coral mainly from the Coast, with pozzolana, an ash-based product found in the Rift Valley.
EAPCC, which sells its products under the brand name Blue Triangle, says the facility will sit on its 300-acre piece.
The planned factory, whose construction timelines will be clear in 2024, will have a production capacity of about 5,000 tonnes of clinker per year.
Clinker produced at this facility will be used for cement production and the excess sold in the neighbouring markets.
"We are looking at investing Sh30 billion ($200 million) in a new clinker facility in Kajiado county. In the next one year, the plans will be very clear as already geologists are on the ground doing surveys" EAPCC’s managing director Oliver Kirubai said in an interview yesterday.
Mr Kirubai said the location of the plant in Kajiado will allow quick transportation of the cement into the market once produced.
The clinker produced at its Athi River factory is not adequate and this may have dulled it’s competitive edge in the market.
"It's a capital-intensive business and we expect the repayment period to span up to about 40 years," he said.
Local cement firms have been ramping up their clinker production in recent years to cut a supply deficit, and also gain a competitive advantage by acquiring the key component at a lower cost.
They are expected to expand their clinker plant capacity by 4.4 million tonnes per year, bringing the industry’s production capacity to 10.7 million tonnes by 2025.
EAPCC has, however, suffered years of neglect from legacy problems of under-investment and cash flow constraints that have cut production and lost its market share.
EAPCC resumed full clinker production in September 2022, after investing Sh500 million to revamp its Athi River plant whose frequent breakdowns had affected the supply of its products to the market.
Bamburi Cement, National Cement, and Mombasa Cement also produce their clinker.
EAPCC swung to a full-year loss of Sh1.3 billion for the financial year ended June 2023, reversing a previous Sh541.5 million profit last year.
The loss is attributable to higher costs which raised the firm’s cost of sales to Sh3.9 billion in contrast with Sh2.9 billion previously offsetting a 37 percent growth in revenue. The cement manufacturer’s revenues rose to Sh2.9 billion in the period from 2.1 billion previously.
