Bamburi Cement advanced a Sh500 million loan to its subsidiary Bamburi Special Products (BSP) Limited, Kenya’s supplier of concrete paving blocks to be repaid in six years.
The loan, whose use was not disclosed by Bamburi, adds to a Sh316 million bank overdraft held by BSP at Citibank.
The Bamburi subsidiary supplies ready-mix concrete and precast concrete blocks used for drainage, edge constraints, fencing, and walling with operations in Nairobi and Mombasa.
“During the year the company advanced a Sh500 million loan to Bamburi Special Products Limited, its fully owned subsidiary. The loan is unsecured with an effective interest rate of 11.55 percent and is repayable in six years,” said Bamburi in the freshly published annual report.
BSP made a repayment of Sh45 million in the year ended December from the loan advance.
“Despite a challenging year in a fragmented market environment, BSP managed to turn around its operations resulting in a 104 percent earnings before interest and taxes increase. This was mainly driven by enhanced market presence, efficient logistics operations, strategic pricing, and process and mix optimisation,” read the annual report concerning the subsidiary.
The parent company announced that it will cease production of Ordinary Portland Cement within its product line from January 1, 2024.
This is part of its commitment to decarbonising its operations and providing a greener option for building materials.
The Nairobi Securities Exchange-listed cement producer said in the year ended December 2023, the group’s working capital facilities amounted to Sh8 billion out of which the undrawn facilities were Sh7.4 billion.
