In a restructuring plan unveiled this week, East African Portland Cement (EAPC) has said it will lay off more than 1000 of its more than 1500 workers, reducing the firm’s headcount to just 500, the Daily Nation reports.
“We are overly overstaffed with our employee numbers at over 1500 and close to 2000. By benchmarking with the rest of the industry we need only 500,” said Bill Lay, EAPC’s chairman.
The company, which made an operational loss of KES1.6bn (US$15.7m) in the last financial year, currently has a wage bill equal to around 31 per cent of revenue.
The firm has said it will seek to mortgage 2000 acres of unused land to the government in return for a KES10bn payment which will be used to fund a programme of voluntary redundancies and support other restructuring efforts.
In its earnings statement for the last financial year – published earlier this month – EAPC was only profitable due to the upwards revaluation of its real estate portfolio. The company’s two largest shareholers – the government and LafargeHolcim – reacted negatively to the accounts.
Over the past three years, EAPC’s market share in Kenya has fallen from 23 to 11 per cent, while its plant – rated at 0.45Mta – only produced 0.38Mta in the 12 months to June 2016 due to breakdowns.
The company plans to close its factory next March to refurbish its kiln and increase capacity to 0.48Mta.
