…energy cost cutting move will see company save over Sh.200m per year while improving product consistency and availability
Nairobi, August 4, 2017: East African Portland Cement Company (EAPCC), Kenya Power and KETRACO have commissioned a new 220/66KV power line exclusively dedicated to the cement maker’s power needs to enhance efficiency at its Athi River plant.
The power line is expected to ease reliance on the Athi River-Salama feeder power line by giving EAPCC a dedicated power line from a newly constructed substation for its power needs. The strategic move is geared towards cushioning the iconic cement maker against incessant power outages that heavily impact on production efficiencies and consistency.
Speaking during the commissioning, EAPCC’s Managing Director, Simon Peter Ole Nkeri, said investment in the power line will enhance product availability to improve the firm’s competitiveness. “Minimal power interruptions will increase efficiency in production operations, consistency in product availability as well reduce production costs,” said Simon Peter Ole Nkeri. “This is good news for our customers as it will ensure that Blue Triangle Cement is available in the market consistently and at a competitive price”.
Improving operational efficiencies and product availability through energy stabilization has been identified as a key plank in EAPCC’s medium term plan as the cement maker revamps its internal operations to return to profitability.
The move will see the company’s energy costs reduce by over Ksh. 200 million out of a total annual energy bill of Ksh 1 billion. It costs the company at least Ksh 1 million per hour for any downtime caused by power outages.
Lack of consistent power supply has been a major challenge in the cement manufacturing industry which has left companies struggling to meet their production costs slowing the sector’s growth. “Cement manufacturing is an energy intensive process, both in terms of thermal and electrical energy therefore this new power line and the guarantee of stable energy supply that it offers will go a long way towards improving our competitiveness and boost returns to our shareholders through higher production and revenues,” said Ole Nkeri.
The dedicated power line will shield EAPCC power needs from numerous outages as a result of sharing the current line with other consumers. The 66KV line is exclusive to EAPCC which is now able to draw power directly from the substation at Kitengela which is only 1.5 km away from the factory. Before the commissioning of this new line the company drew its power from Embakasi which is 16 kms away.
According to an East African Cement Industry Report, despite cement consumption growth, at a CAGR of 13.4% in the period between the year 2009 and the year 2015, energy costs have accounted for about 26% of the total manufacturing cost of cement, limiting profit margins. At the cost of electric power at 0.14 USD/kWh, the average specific power consumption for a cement plant was 111 kWh/ton of cement with an average peak demand of 9.7 MW in 2016.
With the housing demand taking up 65% of total cement demand, infrastructure and organized infrastructure taking up 25% and 10% respectively in Kenya, EAPCC is planning to increase its utilization through plant infrastructure investment.