Athi River Mining Ltd (ARM), has announced a 34 per cent increase in its 2009 full-year pre-tax profit as stiff competition looms from anticipated new players.
The listed firm saw an across-the-board increase in sales as its pre-tax profit jumped to KES948.7m (US$12.4m). Its turnover rose 11 per cent from KES4.6bn in 2008 to KES5.1bn for the financial year under review.
“Though 2009 was a challenging year in view of the global financial crisis that reduced liquidity in the markets, the company took pro-active measures to protect and grow the business,” Athi River Mining managing director, Pradeep Paunrana told an investor briefing on Friday.
He said the construction industry in the region is expected to continue growing, and there was need to add capacity. Besides cement, the company also trades in lime, sodium silicate, minerals and fertiliser. ARM will pay KES1.25 as dividend, the same payout as in the previous year.
It is anticipated that competition in the cement business will stiffen in the next three months when new companies start operations. National Cement Ltd, a member of the Devki group of companies, is expected to start operations in the next three months.
Mr Paunrana said the entry of new players will certainly increase competition but warned that there is no need for unsustainable price undercutting. “The East African region market is growing, and we anticipate the consumption of cement to go up. This means that we will be able to satisfy this market,” he said.