A Parliamentary committee has advised the management of the troubled East African Portland Cement Company to sell off some of its assets including disputed parcels of land to allow it offset some of its debts amidst a growing cash crunch within the company.
The National Assembly’s Public Investments Committee on Commercial Affairs and Energy told the management of EAPCC that the disposal of idle land and partial privatization can help partly resolve its financial woes.
EAPCC has in the last few months been embroiled in a longstanding land dispute case with home owners and squatters said to have settled on parts of its disputed land in Machakos county.
The company has also been battling a financial crisis after it was forced to cut its permanent staff by about 78% in the year ended June 2021.
The firm, which returned to profitability after posting a net profit of Sh1.8 billion in the year ending June 2021, from a loss of Sh2.7 billion, cut its permanent staff by 209 in a massive layoff.
EAPCC, according to a report by Auditor-General Nancy Gathungu, also defaulted on a loan from one of its key lenders, forcing it to dispose of some of its idle lands to retire the debt.
And in a meeting with the PIC committee, members of the team led by chairman David Pkosing urged the company to find alternative ways of settling some of the debts it owes, as well as the land disputes.
Pkosing who is also the Pokot South MP, noted that the company had been sitting on valuable assets including land and possible profitability if it got strategic investors to turn around its business.
“You need to occasion the land sales to raise revenue and, you should seriously consider partial privatization to turn around your business,” said Pkosing.
The meeting was convened to discuss material uncertainty related to growing concern at the Company, which has seen it consistently operate at losses, as pointed out in reports of Auditor-General for 2019/20 and 2020/21 financial years.
Present at the meeting were EAPCC’s Managing Director Oliver Kirubai, Principal Secretary for Industry, Juma Mukwana, Principal Secretary for National Treasury, Chris Kiptoo, the National Social Security Managing Trustee, David Koros and other stakeholders.
Kirubai told the committee that the company had largely been tied back by internal and government bureaucracies which had seen the Company’s fortunes sink as its private competitors in cement manufacturing flourished in the market.
Kiptoo on the other hand said the National Treasury will work closely with the Ministry of Trade Investments and Industry to initialize the partial privatization process.
The idea of privatization was supported by Mukwana who said it is a great strategy to revamp the Company which was once Kenya’s leading Cement manufacturer and a dominant player in the Eastern African market.