Electrical wires manufacturer East African Cables has acquired a two-acre piece of land in Nairobi’s Industrial Area to expand its operations.

The company, which already has a manufacturing plant along Kitui Road in Nairobi, plans to set up a new factory on the Sh250 million land located along Addis Ababa Road.

“We have already acquired prime industrial land next to our existing facilities to serve as an expansion platform for our manufacturing operations,” said EA Cables in a statement.

The cable manufacturer said it is also stepping up efficiency at the Kitui Road factory by installing modern machines, driven by increased demand for its products in the region.

EA Cables’s main market is energy firms, real estate developers and telcos.

The firm is counting on increased demand for its products in the region where governments and utility firms are spending billions of shillings on power generation, transmission and distribution.

The company said it also plans to introduce new products in the medium term, but did not give details.

The Kenyan government has allocated Sh23 billion in the coming financial year to finance installation of power transmission systems by the Kenya Electricity Transmission Company (Ketraco).

Kenya Power also plans to spend Sh52 billion on electricity distribution and new substations in the same period.

The government is set to spend another Sh10 billion in the new financial year to develop geothermal energy as part of plans to raise the country’s overall generation capacity from the current 1,664MW to 5,108MW by 2017.

The Tanzanian government has also laid plans to expand the country’s power generation capacity from the current 1,100MW to 2,780MW by 2016.

Uganda is set to add another 600MW to its national grid as part of plans to significantly raise its energy capacity from the current estimate of 680MW.

“These initiatives have undoubtedly created more demand for our products,” EAC said in a statement.

The company did not give details on how it plans to fund the expansion plans.

Its parent firm TransCentury is in the process of raising its stake in the Nairobi Securities Exchange-listed firm to nearly 70 per cent.

TransCentury is in the process of taking over PE fund Aureos’ 3.55 per cent stake in EA Cables in exchange for 2.2 per cent of TransCentury stock worth more than Sh100 million.

READ: TransCentury eyes tighter EA Cables grip in share swap

This will see TransCentury’s stake in EAC rise to 68.38 per cent from the current 64.83 per cent. The company says the cable manufacturer is one of its key subsidiaries in the energy and infrastructure sectors where it is going to invest more to grow its earnings.

EA Cables has, however, recently suffered from slower sales amid escalating costs. Its net profit in the year ended December dropped 31 per cent to Sh398.2 million compared to Sh522 million the year before.

This came as sales grew 4.5 per cent to Sh4.5 billion, but this increase was offset by a 30.3 per cent jump in distribution costs to Sh167.2 million.

Its share price has dropped 17.1 per cent over the past six months to trade at Sh14 at the Nairobi bourse.