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Top cement firm eyes expansion

Feb 25 2013 12:22 Reuters

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Nairobi - Kenya's East African Portland Cement plans to expand after returning to profit during the six months ended December, boosted by cost cutting and improved cement sales.

Portland, Kenya's number three cement producer, said on Monday it was optimistic of strong full-year results and was exploring expanding to Tanzania.

The firm, which also operates in Uganda and South Sudan, was also looking to grow its clinker production line after returning to profit for the first time in two years.

"We are now discussing the financing of these projects," managing director Kephar Tande told investors in Nairobi.

Portland plans to raise new capital through the Nairobi bourse, with the aim of increasing clinker production to 1.5 million tonnes by 2016 from 450 000 tonnes.

Tande also expects Portland to double its export market to 10% by 2014, while noting "good prospects" of the company paying a dividend to shareholders for the first time since 2010.

Construction has been one of east Africa's fastest growing sectors over the last decade, fuelled by a burgeoning middle class with higher disposable incomes. Returns on investment in the sector have outpaced those of equities and government securities.

Portland made a pretax profit of 376.27m shillings ($4.3m) for the six months ended December, compared with a pretax loss of 247.20m shillings during the same period last year.

Tande said the business boosted profits by saving about 850m shillings by reducing inefficiencies at its plants, which led to greater production of clinker, a key raw material for making cement.


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