The East African Portland Cement Company (EAPCC) has offered 800 of its employees an option of going for early retirement as it struggles to pay salaries and other utilities.
The Cement Company has asked the employees to voluntarily apply for an early retirement stating that the program will help the company achieve its operational costs.
“The industry has witnessed a significant decline in productivity, resulting in depressed revenues and manpower utilization leading to unprecedented job losses, “said EAPCC acting managing director Stephen Nthei.
The Early Retirement Programme comes months after the Company withdrew its decision to declare all employees redundant to cut the company’s costs. The Company argued that it was spending more on the workforce while the productivity was low thus it wanted to lay off 600 of its employees.
The Covid-19 pandemic has made the already bad situation for EAPCC even worse, but the company was already at the edge of the cliff before the outbreak stepped foot into the country.
Before the Covid-19 Outbreak, the company was already making losses with its revenue dropping by 46.2 percent in 2019 as compared to 2018. The drop in revenue was attributed to stiff competition in the industry as well as high operational costs by the company.
For the year ending June 2019, EAPCC posted a 31.4 million dollar loss with its liabilities spiking by 94.3 million dollars from 53.6 million dollars the previous year. The company has been struggling to remain afloat but according to experts, it is technically insolvent.
Last year, EAPCC resorted to selling its idle lands in Machakos to at least earn some cash. The land was totaling up to 2000 acres, but the Company had to evict 14,300 resident squatters before selling the land.
In January 2020, the loss-making company defaulted loans worth 2.61 million dollars from Kenya Commercial Bank (KCB).
Global Cements News revealed that EAPCC could not honor its debts after auditors from PricewaterhouseCoopers reported that the Cement Company made a loss of 28.0 million dollars in the twelve months to 30 June 2019.