Kenya’s major cement maker ARM Cement is looking for a strategic investor to provide equity capital, CEO Pradeep Paunrana has said.
Speaking to news agency Reuters Mr Paunrana said that problems facing its new Tanzanian operations has resulted to dwindling fortunes.
Since 2015 ARM has been reporting a drop in revenues. In September this year, the firm reported half-year loss attributing it to reduced construction activities in the country.
“The process is open and it may be an injection of equity, it may be partial sale. It could be any structure the board will decide on.” Mr Paunrana told Reuters.
Competition in the cement business in East Africa has increased sharply in recent years forcing local firms to respond by lowering prices.
In Tanzania, Tanga Cement trading at the Dar es Salaam stock Exchange as Simba, announced a half year net loss and consequently declared no dividend to shareholders.
“The competitive environment persisted in the period under review leading to lower prices of cement in the market,” he said in statement.
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But investors are bullish that the construction industry will pick up again in the near future a move that will be a boon for cement manufacturers. Projects that are in the pipeline include construction of the second phase of Kenya’s Standard gauge Railway line, the Lapsset project among others.
In Tanzania, an electric railway line is planned for construction. Also in the pipeline is the construction of Bagamoyo Port and a major oil pipeline running from Uganda to Tanzania.