East African Business Week (Kampala)
Cedric Lumiti
4 October 2008
Nairobi — The East African Portland Cement Company (EAPCC) has embarked on energy savings initiatives.
The company has invested in excess of Ksh1 billion in a coal milling facility to replace usage of fuel oil in the clinker manufacturing process due for completion in December 2009.
These projects together with the company's recent ISO certification are expected to boost productivity and enhance its ability to serve customers better in the wake of heightened competition.
The company this last week announced a reduction in profitability.
EAPCC's new Managing Director Eng. John Nyambok attributed the drop in profitability to the foreign exchange losses accruing from the Japanese loan being serviced by the company twice a year and explained that EAPCC was already negotiating with the main shareholders and financial institutions involved to convert the loan into local currency to hedge against such exchange loses.
Eng. Nyambok also reassuring stakeholders of EAPCC not to be diverted by selfish interests who are bent to lower the shareholder value, through insider trading.
"Insider trading is a criminal offence punishable by law and we are narrowing down on the culprits who are behind what was witnessed in the stock exchange recently with a view to restoring confidence and discouraging such practices in future."
Nyambok called on the Kenya Capital Market Authority (KCMA) to improve on the trading rules at the Nairobi Stock Exchange which have since recently seen the company's shares drop drastically in stock exchange market.
He said that the drastic drop was a very serious drawback to the performance of the company and called upon the KCMA Market Authority to expeditiously look into the matter before other companies suffered the same ordeal.
Nyambok also announced the Company's growth strategy to overcome the challenging operating environment experienced across the region.
He acknowledged EAPCC's full year performance: "The 12 months to 30 June 2008 was generally a difficult period for most businesses across the region. The impact of the post election situation on the economy saw inflation rates rise to levels unseen in the recent past putting immense pressure on all our operations."
Maintaining a positive outlook, Eng. Nyambok underscored the Company's 48% increase in its operating profit for the year to June 2008 - Ksh1.1 billion against Ksh757 million recorded in the year before.
He said that performance was stimulated by EAPCC's focus on increased production of cement despite the significant cost pressures particularly transportation, fuel and power.
"This drive is spelt out in the strategies we have put in place to be a low cost producer offering value for money and increasing shareholder value."
Eng. Nyambok also highlighted his continuous growth strategy. "We are in the process of implementing 'source plan action change teams' to ensure continuous improvement in EAPCC's business operations with the overall objective of driving down the cost of production.
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