Kaa na lafarge Bamburi
The rest achana nazo

National Cement Company(Simba Cement) will be launching its clinker plant today. ARM main proposition/competitive edge has been that it is a producer of clinker. Are we looking at a future where there will be oversupply of clinker and hence more lower cement prices? Anyone with cement production vs. consumption statistics in East Africa??

ARM issues a loss warning.
The loss for FY 2017 will be bigger than last year's.

Must be several years of cooking the books. This clearly goes way beyond elections, TZ coal or even the economy.Intact, despite the drip drops of new information, this thing should be trading at KES1

Debt fueled (aggressive) expansion.

They went into Tanzania wakachomeka vibaya

Walichomeka vibaya sana!

Lafarge begins due diligence on ARM Cement as Dangote Backs out

It was reported late last year by Bloomberg that four of the world’s largest cement manufacturers; LafargeHolcim, Heidelberg Cement AG, Dangote Cement Plc and Titan Cement Co. SA of Greece were exploring a potential bid for Kenyan troubled cement maker ARM Cement.

A source with knowledge of the matter has intimated to Kenyan Wallstreet that Dangote Cement, Heidelberg and Titan Cement companies have formally dropped out of the bidding, leaving Lafarge to explore possibilities of buying a majority stake in the company which is currently on the verge of sinking if not rescued on time.

According to the source, Lafarge, the world’s largest cement maker has engaged a team of consultants to conduct due diligence on ARM Cement and explore synergies that could be created if the deal goes through. The process, which is at an early stage, seeks to analyze potential opportunities, and perform financial valuations and business assessments including the identification of risks and opportunities.

“We are in the process of finding an equity and a strategic buyer to inject equity into the business,” ARM MD Pradeep Paunrana was quoted by Bloomberg in December. “The process is on and we expect over the next few weeks to complete that process.” He also added that there were more than six potential investors at the time.

Nevertheless, this buy would be an immensely bold, complicated and pricey move: NSE-listed ARM Cement has a market cap of Sh 12.7 Billion but the company’s majority shareholders (Paunranas & CDC) expect a premium offer.

Just last week, ARM issued a late profit warning, projecting that the Group’s net loss for the financial year ended 31 December 2017 may widen by at least Sh3.5 billion from a loss of Sh1.4 billion in the previous year. The Group is of the opinion that difficult market conditions have negatively impacted its performance as well as the import ban for coal in Tanzania. Additionally, the Group attributes a possible net earnings decrease on the extended and disruptive election period in Kenya and a strain on its working capital.

It’s also worthwhile mentioning that LafargeHolcim is already a significant player in the local market with 41.7 per cent stake in East Africa Portland Cement (EAPCC) and a controlling stake of 58.9 per cent at rival firm Bamburi Cement, Kenya’s biggest cement producer.

From being one of the priciest stocks in the bourse to literally angling for a bailout. Perils of over-leveraging.

With ARM this is a case of deja vu as @VVS has intimated above. They tend to bite more than they can chew. Despite the anemic econ the other cement producers are not in the same predicament.