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Nakumatt eyes first Kenyan supermarket entry into Juba and Burundi

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A Nakumatt outlet in Kigali, Rwanda. The Kenyan retail chain is targeting entry into South Sudan and Burundi. NATION PHOTO|CYRIL NDEGEYA 

By SIMON CIURI

In Summary

• The expansion into Juba and Bujumbura will cost an estimated Sh1.5 billion.
• Nakumatt is seeking to export the shopping mall culture to the largely informal retail markets of Burundi and South Sudan.

Nakumatt Supermarket is targeting entry into South Sudan and Burundi, making it potentially Kenya’s first big retail chain to open shop in the two countries.

 

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Nakumatt Holdings’ head of strategy and operations Thiagarajan Ramamurthy said in an interview that the retailer could start operations in the two countries as soon as next year, having already identified developers for earmarked premises.

The expansion into Juba and Bujumbura will cost an estimated Sh1.5 billion.

“We have already identified the banks that will finance our expansion. It’s a huge investment that could not have been managed by our internal cash and that’s why we opted to borrow,” said Mr Ramamurthy.

Nakumatt is seeking to export the shopping mall culture to the largely informal retail markets of Burundi and South Sudan, which have low retail penetration and are mainly dominated by mini-marts and kiosks.

Mr Ramamurthy said the retailer is only awaiting completion of the premises before starting operations. “We decided to start our operations afresh because buying an already existing business would come with more costs,” he added.

Nakumatt has just concluded the acquisition of three stores in Tanzania previously owned by South African retailer Shoprite.

The Sh3 billion deal was financed through a KCB loan, but Mr Ramamurthy said the Juba and Bujumbura entry will be funded by international lenders.

READ: Nakumatt takes over first Shoprite store

“We will work with various international creditors to create a strong pool of resources that will enable us start operations in the two countries concurrently,” said Mr Ramamurthy, who however declined to name the banks that are involved in the transaction.