3 ts read
- The chinses firm will inject $116 million into the unit, Maweni Limestone Limited, to settle liabilities
- An additional $30 million will be invested to complete plant construction and upgradation
The Tanzanian unit of Kenya’s ARM Cement Plc has been bought by China’s Huaxin Cement company. The cement company ran into trouble and was put under administration in August 2018 by some of its creditors over a $190 million in debt. Its shares were suspended from the Nairobi bourse
In a joint statement by its administrator PricewaterhouseCoopers(PWC) and Huaxin stated that the chinses firm will inject $116 million into the unit, Maweni Limestone Limited, to settle liabilities. An additional $30 million will be invested to complete plant construction and upgradation. The spokesperson from PWC revealed that Maweni had debts with a range of creditors, including local commercial banks. Given the severe financial crisis of the company, PWC focussed its efforts on identifying a suitable investor with the ability to make the requisite investments and inject much-needed capital to boost Maweni’s operations. Huaxin owns more than 200 plants with an annual production capacity of 100 million tonnes of cement. It also produces aggregates and concrete and records revenues of $4.5 billion. Some of its other projects in the pipeline include greenfield cement plant projects in Uzbekistan and Nepal.
ARM Cement had an installed annual production capacity at its two plants in Kenya of 1 million tonnes, while in Tanzania, ARM has a 1.6 million tonnes in annual production capacity at two plants of equal size. After investing heavily in its Tanzanian business in 2014 without generating any returns, ARM Cement slipped into the red. Its Kenya operations were sold to another Kenyan company, National Cement, for $50 million last year. Its plant in Rwanda produces 100,000 tonnes of cement a year.
