EA Portland Cement to lay off entire workforce

August 8, 2019 (3 weeks ago)
Nthei says all positions in the company have been declared redundant and will affect both unionisable and non-unionisable workers in the company/FILE

, NAIROBI, Kenya, Aug 8 – Loss making cement manufacturer East African Portland Cement (EAPCC) is set to lay off all its employees in a restructuring plan expected to save the company from further losses.

In a memo seen by Capital Business, the firm’s CEO Stephen Nthei says all positions in the company have been declared redundant and will affect both unionisable and non-unionisable workers in the company.

Nthei says the Nairobi Securities listed company has been making losses of up to Sh8 million daily which has impacted negatively on sales and subsequent profitability, hence the move.

Subsequently, all jobs will be reconfigured in terms of job consolidation and enrichment, in line with the restructuring.

The cash strapped company reported a 30 percent increase in loss to Sh1.26 billion for the half year ended December 2018 up from the Sh949.2 million loss it posted six months before.

The company attributed the heavy loss to increased output prices, a sluggish market and production challenges, arising from the company’s tight working capital position.

This is not the first time the company is restructuring.

In 2016, the company fired 1,000 employees and reduced its staff count to 500 people.

EAPCC’s chairman Bill Lay at the time said the company was overstaffed with employee numbers being over 1,500.

“By benchmarking with the rest of the industry we need only 500,” Lay said.

Last year, the company laid off 520 employees with the company saying it opted for non-renewal of contracts due to a bloated workforce whose wage bill was unsustainable.

In November 2018, the firm’s then Managing Director and Chairman Simon Ole Nkeri said it required Sh15 billion to affect a turnaround in its fortunes.

This is after the Auditor-General Edward Ouko described the cement manufacturer, once a giant in the industry, as insolvent because it could not pay its debts.

Nkeri told the Senate Committee on Trade and Tourism that the Sh15 billion of the capital injection would go towards settling employees’ dues, retire expensive Kenya Commercial Bank (KCB) loans, repay the long outstanding JICA loan, refurbish its plant and settle suppliers’ dues.

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