Athi River Mining Profits Up 20 Percentadmin
Athi River Mining has announced a 20 per cent increase in profits before tax and laid out its strategy to increase cement production.
The firm will increase its capacity to produce clinker — a major component in cement manufacturing – and consider investing in its own power plant to keep energy costs down.
Managing Director Mr Pradeep Paunrana, said pre-tax profits for the nine months ended September had risen to Sh250 million thanks to the boom in the construction industry. Turnover grew 14 per cent to touch Sh1.8 billion.
Demand for its fertilizer products increased following the revival of key agricultural segments such as coffee, tea and tobacco. It was the same for industrial minerals to 70 per cent during the period.
“Business has grown over all our business divisions with increased capacity utilisation in our Tanzania and South Africa subsidiaries,” Paunrana told an investor briefing on Wednesday.
Paunrana said ARM is mulling over the possibility of starting its own power plant to reduce operational costs.
“We have seen additional opportunities in the cement business but we first want to set up a captive power plant (in the) Kaloleni area to drive the expansion of (the clinker production) division,” he said. Power supplies from the proposed unit will go towards cement manufacture, while any additional amount would be supplied to the national grid, Paunrana said.
During the period, ARM commissioned a new plant at Kaloleni capable of producing 250,000 tonnes of clinker per year and triple the company’s cement manufacturing capacity. It will also reduce ARM’s production costs in the region.
Paunrana announced that the company was looking at the possibility of hiking the Kaloleni plant’s capacity by a further 50 per cent due to the existence of a regional shortage in clinker capacity.
While the cement consumption has grown by 16 per cent in Kenya, the total cement market in Kenya is expected to grow by over two million tonnes this year.
The demand for cement in the East Africa region is also growing rapidly, hence the need to increase the Kaloleni clinker capacity to 330,000 tonnes per annum.
This expansion would be completed in the next 12 months.
Among other expansion initiatives, ARM’s third sodium silicate plant will be commissioned before the end of this year. Sodium silicate, a compound used in cements, has a number of other industrial uses. There are also plans to double its lime production capacity in Tanzania next year. Lime is used in clinker production.