Inflation, which raced to a near 15-year high of 31.5 per cent in May, before retracing to 26.5 per cent in July, was a challenge to its growth. The danger ahead is that inflation increased costs of manufacturing and production which could prove difficult to pass on to the customer. Hence, ARM’s margins are likely to temporarily go down but over a period of time, as things stabilize, it should be able to recover.

ARM is counting on product and market diversification to meet its profit forecast.

As the regional economy continues to grow and strengthen and the government keeps looking at the infrastructure needs of the country, demand for cement is bound to keep on growing. The fast growing economies of Uganda, Tanzania, Rwanda and southern Sudan will boost ARM’s sales.

ARM shareholders resolved to turn the company’s three divisions, cement, fertilizer, and industrial and chemicals, into wholly owned subsidiary companies. That decision will become operational in January 2009. Each subsidiary company will be able to raise its own capital and to restructure its strategic investment plan, independent of the other two in the group. Investors will be able to invest in asset-class specific investments and thus able to target their investments.

Some 6,000 individuals own 25 per cent of ARM through the Nairobi Stock Exchange while France’s Lafarge has a 14 per cent share. The founding Paunrana family owns about 50 per cent.