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Inside battle for control of prime cement firm's land

Demolitions at a controversial land that belongs to the East African Portland Cement Company in Athi River on October 16, 2023. [Peterson Githaiga, Standard]

Thousands of Kenyans residing on a disputed parcel of land claimed by the East African Portland Cement Company can now seek to own the land after the state and global cement giant announced its intention to formalise land titles. 

The regularisation plan marks a major U-turn in the raging property dispute between the company and numerous property owners. 

In a notice published on Tuesday, EAPC said priority would be given to those residing on the affected land in Mavoko area of Athi River, Machakos County. 

The affected land, which spans hundreds of acres, is identified by land registration numbers 8784/144 and 653 Mavoko, said EAPC.

The cement company has advised individuals in this predicament to submit their claims within 14 days. “East African Portland Cement wishes to notify members of the public of its offer to sell the above-referenced parcels of land via a regularisation model,” said EAPC in the notice.

The surprising decision once again sheds light on the power struggles to control valuable assets owned by the cement maker, which is also in search of a strategic investor.

EAPC possesses valuable land that has been desired by land barons, brokers and even government officials.

In this complex game involving influential individuals, unsuspecting land buyers bear the consequences.

When faced with financial difficulties, the financially troubled company has often relied on its land assets to generate revenue.

Over the past few years, EAPC has been selling off its land amid fears of asset stripping. For example, the company says it received shareholder and board approval last year to monetise its unused assets. Specifically, EAPC intended to sell 1,907 acres of land classified as investment property, expecting Sh10 billion.

“To expedite the proceeds from the land sale, the Board approved a regularisation plan for LR 8784/144, 8784/145 & 8784/653, totalling 907 acres, which had a significant number of squatters,” EAPC explains.

According to the company, this plan ensures the local community has the first opportunity to purchase the land, with expected proceeds of Sh5 billion to be paid within the next three years.

Additionally, EAPC has divided 1,000 acres of the adjacent property LR 10424 into 50-acre plots, which are currently available for sale, with expected proceeds totalling approximately Sh5 billion.

EAPC recently stepped up the process of selling its unused land in Mavoko to raise additional funds. “The company is actively marketing its land to potential buyers, having successfully divided 1,000 acres into 20 parcels for easier sale,” EAPC disclosed earlier.

“The proceeds from the sale of investment property will be allocated towards plant refurbishment and working capital support.”

The management of the company has previously sought approval from its shareholders for the disposal of idle land in order to retire KCB debt obligations, strengthen working capital, improve plant operations, and reduce fixed costs. 

According to EAPC, the company has subdivided 1,000 acres of LR 10424 into 50-acre land parcels to address general liquidity challenges in large land acquisitions. 

To expedite the realisation of proceeds, the company has engaged banks to provide financing for land acquisition by prospective buyers.

The firm holds twenty-six pieces of leasehold land (6,366 acres) under long-term lease arrangements. 

In October 2019, the company voluntarily surrendered LR 10425, totalling 4,272 acres, to the National Government in support of the affordable housing agenda, following shareholder approval at an Extraordinary General Meeting held on September 27, 2019. 

However, the Central Organization of Trade Unions filed petition number 46 of 2019 in the Environment and Lands Court objecting to the surrender, which was upheld in a ruling delivered in December 2021. 

EAPC chairman Edwin Kinyua said they planned to dispose of idle land, particularly to the squatters who had encroached on the land. 

Mr Kinyua and CEO Oliver Kirubai both expressed a desire to see this process completed successfully. The disposal of idle company assets, such as mined pieces of land, has also been identified as a strategy for raising capital. 

The company is currently engaging squatters who have invaded its land in Mavoko with the aim of resolving the outstanding issue amicably.

Tuesday’s announcement by EAPC is anticipated to provide significant relief to numerous landowners entangled in disputes who had been apprehensive about the potential loss of their land. 

The demolitions and evictions that have taken place in Mavoko have been accompanied by tears of anguish and despair. This has led to the destruction of numerous homes, schools and churches allegedly built illegally on EAPC land.

Bulldozers have continued to demolish houses in Athi River on disputed land, forcing families to endure nights in the cold since the demolitions commenced on Friday of last week.

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