Following reports that the Kenya’s oldest cement manufacturer, East Africa Portland Cement , may have lost Shs 900 million in thefts from its stores, the company has now announced it will lay off some 1000 members of its staff
And that will cost the state firm, said to be technically bankrupt, Sh2 billion.
Shs 400 million was lost in Uganda while Shs500 million was lost in Kenya.
The company’s debts stand at Shs 4.9 billion while its assets are worth Shs2.1 billion
Chairman Bill Lay says “We are overly overstaffed with our employee numbers at over 1,500 and close to 2,000. By benchmarking with the rest of the industry we need only 500.”
Portland has already closed seven of its depots in further cost cutting measures but theft have continued with more than Shs320 million apparently being siphoned out of the company through fake or inflated rebates given to distributors and clearing and forwarding agencies.
The government owns 25 per cent of the cement manufacturer with the rest going to National Social Security Fund (27 per cent) and its main competitor LafargeHolcim (41 per cent).
LafargeHolcim of France owns Bamburi, the largest cement manufacture whose main factory is located in Athi River just a stone throw from Portland.
Bamburi recently reduced its staff by a large margin.
Portland says it will raise Sh6 billion to settle its debts from mortgaging its vast land holdings in Athi River It will also use Sh2 billion raised from the same source to upgrade its plants.