NBV cement plant held back by funding delays – Business Daily
Nairobi Business Ventures corporate affairs director Vasu Abotula. PHOTO | DIANA NGILA | NMG
Nairobi Business Ventures (NBV) is yet to secure funds for setting up a cement manufacturing plant delaying the company’s turnaround plan through product diversification.
The company’s net profit for the year ending March 2022 jumped 53 percent to Sh50.6 million on aviation, vehicle servicing, and trading revenues but had no income from the cement business.
NBV announced plans to break ground on a cement manufacturing plant in Mavoko, Machakos County in 2021 after shareholders approved a proposal to buy Delta Cement.
The Group said at the time construction plans for the cement factory were at an advanced stage, noting that the project would improve revenues for the company with the ability to produce one million tonnes annually.
The firm said the factory would cost-effectively produce high-quality cement by using the latest technology.
“Fundraising efforts are continuing and when they bear fruit, we will make the appropriate announcements in due time,” the company said in the earnings notice.
NBV commenced its business operations as a wholesaler and retailer of premium leather products.
However, due to the economic recession and lack of demand, NBV opted to diversify its business into more sustainable industries such as the trading, manufacturing, and service sector.
NBV said this diversified business approach was taken to protect the shareholder’s interest and other stakeholders against ups and downs in the business environment due to internal and external factors.
The company which used to sell the K-Shoe brand of shoes, bought four companies Delta automobile, Aviation Management Solution, Air Direct Connect, and Delta Cement to diversify revenue streams.
NBV was able to generate Sh190 million in turnover against Sh45 million in the previous year while the subsidiary Delta Automobile managed to generate Sh595 million of turnover in the period under review.
The aviation business comprising Aviation Management Solution, Air Direct Connect repair that maintains several aircraft including Bombardier Dash 8 Classics, Dash 8 Q 400, CRJ 100,200, Boeing 737- 200/300 models generated a turnover of Sh30 million over the 2021/22 financial year.
The aviation sector is promising due to the growing demand by carriers for affordable maintenance services which they are able to deliver.