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, Reuters reported on Monday.
According to the news agency, Portland, which is Kenya’s number three cement producer, on Monday said it was optimistic of strong full-year results and was exploring expanding to Tanzania.
The company, which also has operations 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,” Reuters quoted managing director, Kephar Tande as saying.
This comes on the heels of PPC’s announcement recently that it would aggressively expand into the African continent. PPC is South Africa’s biggest cement and lime producer.
Additionally, PPC has been pushing ahead with plans to expand into the sub-Saharan Africa. The JSE-listed company believes this move would see revenues gained from the rest of Africa almost double from 21 percent in overall sales to 40 percent over the next four years.
After finalising its acquisition of a 27 percent stake in Ethiopia’s Habesha Cement, the lime and cement manufacturer is on the prowl for acquisitions in four other African countries.
According to Reuters, Portland also 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 expected Portland to double its export market to 10 percent by 2014, while noting “good prospects” of the company paying a dividend to shareholders for the first time since 2010.
Reuters reports that 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, the news agency claimed.