UK retail giants foray into Kenya to boost trade between nations

British envoy in Kenya Mr. Christian Turner The United Kingdom has taken an aggressive push to increase trade between London and Nairobi with its embassy taking the lead in drumming up local support for firms back home.. Photo/NATION 

In Summary

• Speaking during a reception for the visiting Marks & Spencer chairman, Mr Robert Swannell, last Thursday, UK High Commissioner to Kenya Christian Turner hinted that two more major brands will open in Nairobi before year end.
• Mr Turner said that the entry of top-of-the-range brands in Kenya is in no way meant to counter the growing interest by China and Chinese companies in Kenya.  

The United Kingdom has taken an aggressive push to increase trade between London and Nairobi with its embassy taking the lead in drumming up local support for firms back home.

In a span of two weeks, two major, and some of the oldest, brands based in Britain have extended forays into the country; they include Marks & Spencer and Clarks.

And last week, Range Rover launched a new car model at the UK Embassy targeting high net worth individuals.

The fact that the three companies, which have ruled the British retail market for long, have opened shop here is perhaps a pointer to a revival of interest by UK investors in Kenya.

Speaking during a reception for the visiting Marks & Spencer chairman, Mr Robert Swannell, last Thursday, UK High Commissioner to Kenya Christian Turner hinted that two more major brands will open in Nairobi before year end.

“This is a classic example of how big our relationship with Kenya is,” said Mr Turner on Thursday.

Founded in 1884, Marks & Spencer, popularly known as M&S, has 766 stores in the UK and 420 stores in over 50 countries in Europe, the Middle East and Asia.

M&S Food buys over Sh13.8 billion worth of goods per year from Kenya including flowers, tea and coffee which represents 10 per cent of the Sh138b worth of annual trade between the UK and Kenya.

“We are after mutual relationship because the quality of products from Kenya is very high,” said M&S chairman Swannell.

Clarks, a British footwear company that designs, develops and sells a wide range, opened its first store in East Africa at the Thika Road Mall.

The company, founded in 1825, intends to open a second store at the Nakumatt Westgate.

Mr Turner said that the entry of top-of-the-range brands in Kenya is in no way meant to counter the growing interest by China and Chinese companies in Kenya.  

“Trade between Kenya and China is good since they engage in areas that Britain has no expertise in,” said Mr Turner, adding that his country cannot engage in infrastructure projects at the cost at which Chinese firms are willing to undertake.

Statistics indicate that Kenya’s exports to the UK rose by 38 per cent from 2010 to 2011. Kenya sources 3.4 per cent of its imports from UK while exporting 8.5 per cent of its total exports.

Imports have, however, been on a decline having dropped from 13.5 per cent in May 2006, while exports marginally drop from 9.9 per cent in the same period.

Data prepared by the Trade ministry in the same period shows that Kenya exported goods worth Sh3.8 billion to China against an import bill of Sh144 billion. Imports from China were 4.5 per cent in May 2006 climbing to 12.1 per cent in May 2013.

In response, China lowered tariffs and embarked on regulatory reforms aimed at wooing Kenyan traders.

China has, however, become Kenya’s largest source of foreign direct investment and second largest trade partner. By June, China’s cumulative direct investment in Kenya had reached $474 million.

Kenya started warming up to China under former President Mwai Kibaki and his successor Uhuru Kenyatta has been following suit to realign East Africa’s largest economy to the world’s second largest economy.

Under retired president Kibaki, Chinese companies undertook major infrastructure projects in Kenya.

In his tour of China last month, Mr Kenyatta praised the mutual relations between the two countries.

“This is the win-win dynamic that underpins our countries’ bilateral relations. It is the only way through which mutual interests are secured and prosperity guaranteed,” he told an investment forum of Chinese and Kenyan businessmen in Beijing.

The two nations cemented their partnership by signing eight agreements to boost cooperation.

The agreements covered economic cooperation, infrastructure, people-to-people exchanges, finance, environmental protection and energy sectors.

The Chinese Government also extended a Sh425 billion loan to Kenya to facilitate investments in infrastructure and energy generation.

Last month, Kenya signed a deal with Chinese government agency, Geological Exploration Technology Institute of Jiangsu, to undertake and finance mineral survey and mapping across the country, giving the Asian giant an upper hand in future bidding for exploration and mining contracts.

The deal followed the cancellation of 42 licences issued between January and May this year.

Britain, on the other hand, has shown interest in oil and gas with BG Group in Lamu as well as Tullow Oil engaged in exploration in Turkana County as mineral exploration in the country gains traction.

Kenya hosts one of the biggest Chinese diplomatic missions in Africa that boast of one of the largest numbers of employees on the continent, second only to South Africa; China Trade Centre in Nairobi is said to be the biggest in East and Central Africa.