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Listed cable maker, East African Cables is now generating at least 15 per cent of revenue from new products as it aims for profitability in the near future.
Besides, it has a team of electrical engineers who offer installation services for clients.
In an exclusive interview with the Star, the firm’s managing director and CEO Paul Muigai said the firm has intensified innovation and produced electrical accessories including switches and circuits among others used alongside cables.
“Our customer requested quality electrical accessories just like our cables. The board liked the idea and we obliged,” Muigai said.
He said the firm’s financial health is looking up, having reported revenue growth of 41 per cent to Sh2.7 billion in the past financial year.
The company’s cost containment measures anchored on the Total Performance Management (TPM) programme continued to yield fruits, improving Earnings before interest, taxes, depreciation, and amortization (EBITDA), a measure of core corporate profitability by 66 percent to Sh229million from Sh138 million recorded in 2021.
However, the NSE-listed company recorded a net loss after tax of Sh345 million compared to Sh300 million recorded the previous year.
Muigai said they remain focused on growing a strong order pipeline and improving contribution from the export market. Great strides have been made in this area including product and market channel innovations to drive growth.
“Our business is on the right path to recovery, and I am confident that as we implement our refreshed strategy, the business will become profitable and give a return to shareholders in the medium term,” he said.
The firm produces utility cables which include aluminum overhead conductors for aerial transmission lines and service drop cables for secondary overhead transmission.
It also manufactures feeders for residential homes; cables for power and lighting circuits; home electrical appliances; and armored and non-armored cables for electricity distribution.
Besides product diversity, East African Cables has embraced efficiency and customer education in a bid to cut operational costs and counter counterfeits.
“We have been consistent in producing quality and affordable products for the past 50 years. We supplied products used in almost all notable buildings in the country and across the continent,” Muigai said.
It has put in place several measures to help customers identify genuine products in the market to complement the government’s effort to eradicate counterfeits that deny the country at least Sh100 billion every year.
”Apart from media campaigns to educate customers, we have rode on technology to put security labels on products, complete with a reward plan,” Muigai said.
Customers can scratch Zinduka security codes and redeem them for airtime or get a discount on products.
He hailed the multi-agency team on anti-counterfeits, including the Kenya Revenue Authority (KRA) for sealing loopholes exploited by importers who flood the market with substandard goods.
Muigai appealed to customers not to be blinded by short-term price discounts offered by fraudsters, saying that it is costly to buy counterfeits in the long run.
The firm is optimistic that it will soon return to profitability, clear pending loan obligations and accord dividends to shareholders who have been in the cold for nearly five years.
Last month, the firm obtained a court injunction stopping the appointment of an administrator by Equity Bank which is seeking to recover Sh4.8 billion owed to the parent firm, Transcentury Plc.
It had earlier reached out to lenders in Kenya and Tanzania for more loans to help fund a working capital gap of Sh1.24 billion.
Yesterday, Muigai told the Star that they are amicably solving the dispute in court and are keen to service their loans. BY THE STAR