Cement companies face grapple with debts on demand slump

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Cement companies are in trouble as they struggle to service their financial costs in the wake of the coronavirus pandemic.

Bamburi Cement which had a total installed annual capacity to 3.2 million tonnes says it had reached an Sh436 million financial cost last year from Sh258 million in 2018. 

However, investments have been redirected by the pandemic, which has made the company to reset its outlook.

 “Post –Covid-19, with government expenditure, refocused towards the war on Covid-19, we will need to reassess the market and the general economic situation,” said Bamburi Chairman John Simba.

Devki Group National Cement Company is also dancing to the same song.

“We have seen a big drop in demand to 30 per cent because those who have finished projects do not want to start new ones. Profits are down, and it is challenging. But there is nothing we can do because it is a global challenge ad it is not just us,” said Narendra Raval, founder Devki Group founder.

Again, the cement companies are experiencing a fall in the construction sector which recorded a 1.3 per cent drop last year.

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Anthony Kiratu is the Founder of Finsolutions. He is a financial analyst with over 5 years experience in research, investment advisory, valuation and financial modelling. Anthony is a member of the Institute of Certified Investment and Financial Analysts and Institute of Certified Public Accountants of Kenya. He is passionate about development of African Capital Markets through training of investors and dissemination of information for sound financial and investment decision making process. He is also a part-time lecturer in the Certified Investment and Financial Analyst course in the subjects of International Finance, Portfolio Management, Equity Investment Analysis, and Fixed Income Securities. Email: anthony@finsolutions.co.ke Contact: +254 780216631

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