Tough times are in stock for the loss-making cement manufacturer East African Portland Cement after it announced that it would be laying off all its employees in a cost-cutting measure.
East African Portland Cement has been making losses currently operating with negative capital. This means even all the assets under the company are sold, it cannot be able to pay all the creditors.
The company’s CEO has said that all employable positions at the company have been declared redundant and that all employees have no use to the company.
Details have emerged showing the cement manufacturer has been making 8 million shillings in losses daily, the largest loss so far in any NSE-listed company.
For the half-year that ended on December 2018, the company widened its loss to 1.26 billion shillings from 949.2 million shillings just six months before.
Initially, the company had over 2000 employees before firing 1,000 of them in 2016. The remaining more than 500 will be shown the door in a couple of days to come.
In 2018, the company fired 528 other workers in a move that was part of the restructuring plans to cut on costs but it continued sinking deeper into financial turmoil.
The company has attributed its losses and financial tribulations to low uptake of its products in the construction sector, especially in Kenya.
It is ironic that the company is contemplating closing down over sales when Kenya’s construction sector is at its pick, having spiked by more than 25 percent in 2018.
The company says it needs a capital injection of 15 billion shillings for it to get back on its feet with no investor willing to bet on it in its current state.
Woes facing East African Portland Cement are just a snippet of the tough economic times that various companies in Kenya, especially the retail sector are going through.