Companies

Uhuru picks former KWAL boss to steer troubled Portland

uhuru

East African Portland Cement’s factory in Athi River. FILE PHOTO | NMG

The government is betting on former Kenya Wine Agencies Limited (KWAL) managing director Edwin Kinyua as chairman of cash-strapped East African Portland Cement (EAPCC) #ticker:PORT to come up with strategies that will help manoeuvre the firm out of dire financial straits over the next three years.

Mr Kinyua, who was appointed by President Uhuru Kenyatta on Thursday last week to replace William Lay, faces an uphill task of chairing the board of a company in Sh1.47 billion net loss and with debts of more than Sh5.8 billion by close of June 2017.

The appointment takes effect from September 20, a gazette notice said.

Mr Kinyua is not new to government-owned entities.

He served as KWAL boss and exited in February 2016.

He also served on the board of Uchumi Supermarkets #ticker:UCHM, another loss-making firm, until November 2013.

He will be expected to work together with managing director Simon Peter ole Nkeri and the board to steer the Nairobi Securities Exchange-listed company back to profitability.

Last week, the Court of Appeal gave the firm 30 days to deposit Sh350 million in court as a condition to suspend an order that had allowed the sale of its property to recover Sh1.4 billion it owes workers.

The cement maker has been exploring several fundraising options to boost its financial health.

The cement maker is betting on selling 900 acres of prime land in Athi River and a Sh2 billion bailout from the government but none of this options have specific timelines of maturity.

Data from the Kenya National Bureau of Statistics shows that consumption of cement dipped to 1.4 million tonnes in the second quarter of this year, down from 1.5 million tonnes in the first quarter.

Kenya’s cement consumption initially dipped in 2017, the first time in 17 years, leaving EAPCC and Athi River Mining Cement #ticker:ARM in losses as Bamburi Cement’s #ticker:BAMB profit shrunk by a third.