Portland Cement to convert yen loans to dollars
East African Portland Cement Company (EAPCC) will next month swap its expensive yen-dominated loans for dollars and convert to a coal driven plant in efforts to cut cost and return to profitability in 2011.
The cement-maker reported a loss of KES292m in the year to June, 2010, compared to a profit of KES1.8bn (US$22.22m) a year earlier, with the drop blamed on costs arising from exchange losses from the Japanese loan and high energy costs.
EAPCC will swap its yen loans with dollar-dominated ones next month, hoping to reduce exchange losses due to the lower volatility of the greenback compared to the yen.
It will also start using coal to drive its machines to cut its energy expenses,—which account for half of its production cost— by at least 30 per cent.
The CEO, Kephar Tande, told Business Daily that the firm has already secured the services of a bank—which he refused to name—to exchange the KES3.6bn worth of Japanese Yen for the favourable dollars.
“The swap will be done next month since the board has already procured a bank to handle the transaction,” said Mr Tande, adding that the bank is consulting with its accountants before closing the deal next month.
He refused to name the finance house, only saying it is one of their bankers who include Kenya Commercial Bank, Co-operative Bank, Standard Chartered Bank and CFC Stanbic. Published under Cement News
