Monday, November 3, 2014

How Kenya can stop the exit of manufacturers

Battery packaging at the Eveready East Africa Ltd factory in Nakuru, which closed down last month in cost-cutting measures. PHOTO | SILEIMAN MBATIAH
Battery packaging at the Eveready East Africa Ltd factory in Nakuru, which closed down last month in cost-cutting measures. PHOTO | SILEIMAN MBATIAH 
By CAROLINE MUGO
In Summary
  • Building a knowledge economy would make the country more attractive to investors.

The recent evacuation of factory operations by two legendary companies out of Kenya is the latest in a spate of exits by multinationals that is sending a chilling message about the local business environment.

Bata aims to stamp footprint with 25 more stores

Corporate News
The newly refurbished Bata store at the Hilton Hotel in Nairobi. PHOTO | COURTESY
The newly refurbished Bata store at the Hilton Hotel in Nairobi. PHOTO | COURTESY 
By MUGAMBI MUTEGI
In Summary
  • Bata Kenya has secured 800 square metres of space in the upcoming Two Rivers and Garden City malls.
  • Managing director Alberto Errico says the company wants to increase the number of its stores from the current 140.

Footwear retailer Bata Kenya plans to open 25 new stores across the country within a year in an expansion plan that has seen it book space in the upcoming Two Rivers and Garden City malls.
The Limuru-based firm has secured 400 square metres of space in each of the two shopping complexes that are currently under construction in Runda and Ruaraka respectively.
Managing director Alberto Errico says the company wants to increase the number of its stores from the current 140.
“The shopping malls coming up across the country are evidence of commerce evolution which is supported by a middle class which prefers to shop in one place,” he said.
“We plan to have a presence in all shopping malls that have a suitable size and location. However, we will still continue opening standalone outlets in towns.” Last year the firm opened a total of 35 stores in the country.
Bata is putting the final touches to what it says will be its biggest outlet in Africa— an 11,000 square metre store to be situated opposite Jevanjee Gardens, along Muindi Mbingu Street.
This large format store is part of the firm’s strategy to open branches whose ample size will see them display their commodities better and give customers more space to shop.
Bata on Friday started selling Clarks, Skechers, Naturalizer and Nike international brands of shoes at their remodelled Hilton Hotel branch with plans to stock them in at least 10 other stores.
The firm is sourcing Clarks and Skechers from regional retailer Nakumatt Supermarkets, the local franchise holders of the British and American brands respectively.
Naturalizer is being imported directly from the American manufacturer while Nike footwear is being supplied by a local franchise holder.
“We have decided to stock these well-known international brands in order to give our customers a wider choice,” Mr Errico said.
“We were already stocking some global brands like Hush Puppies but this is the first time we are selling shoes like Skechers.”
Bata Kenya manufactures about 30 million shoes at its Limuru factory annually and imports about 1.5 million from its sister companies in countries like Pakistan and Bangladesh.
Their expansion drive comes even as the Economic Survey 2014 shows that the leather sub-sector grew by only 0.3 per cent last year and production of finished leather shoes went down by 0.4 per cent.

Bank agencies transacted Sh1bn daily in past three months

Money Markets
An Equity agency outlet on Kenyatta Avenue in Nairobi. PHOTO | FILE
An Equity agency outlet on Kenyatta Avenue in Nairobi. PHOTO | FILE 
By GEORGE NGIGI
In Summary
  • Central Bank of Kenya figures show 30,449 agents contracted by 16 banks conducted 14.5 million transactions worth Sh82.2 billion in the three months to the end of September. This translated to 163,000 deals valued at Sh913 million daily.
  • Agency banking allows lenders to reach more geographical coverage without opening new branches.

Bank agents are handling nearly a billion shillings daily barely four years after the concept was introduced into the country.

Judiciary sets up building unit amid failed deals

Politics and policy
Chief Justice Willy Mutunga at a past event. PHOTO | FILE
Chief Justice Willy Mutunga at a past event. PHOTO | FILE  
By GEORGE OMONDI, omondi@ke.nationmedia.com
In Summary
  • The special unit, to be based in Nairobi, will be headed by a chief architect who will supervise the construction and repair of court buildings countrywide.
  • Lack of in-house building professionals has in the past forced the Judiciary to turn to private consultants for supervision of construction works.
  • The Treasury allocates millions of shillings each year for construction, repair and renting buildings by the Judiciary.

The Willy Mutunga-led Judiciary is setting up an construction unit to manage its assets in the wake of a recent loss of millions of shillings through questionable property deals.

National Cement plans Sh1.7bn coal fired power plant

Corporate News
National Cement factory on Mombasa Road. The firm aims to save on energy costs with a Sh1.7 billion power plant in Kajiado County. PHOTO | FILE
National Cement factory on Mombasa Road. The firm aims to save on energy costs with a Sh1.7 billion power plant in Kajiado County. PHOTO | FILE 
By KIARIE NJOROGE, knjoroge@ke.nationmedia.com
In Summary
  • National Cement to generate its own electricity for limestone mining, clinker manufacturing.
  • The firm will transport the clinker to its factory in Lukenya –where it produces finished cement — whose capacity is being expanded to 1.7 million tonnes per annum from the current 600,000 tonnes.
  • Cement production is a power-hungry process, making energy costs one of the largest expense items for manufacturers of the commodity.

National Cement is set to build a 15 megawatt coal-fired power plant in Kajiado at a cost of Sh1.7 billion as part of its expansion plan.

Tourism in new threat after attack on Army barracks

Politics and policy
An Administration Police Officer inspects damaged vehicles at the AP Camp in Malindi on November 2, 2014. PHOTO | KEVIN ODIT
An Administration Police Officer inspects damaged vehicles at the AP Camp in Malindi on November 2, 2014. PHOTO | KEVIN ODIT 
By BRIAN WASUNA
In Summary
  • Tourist arrivals in Kenya fell 15.8 per cent to 1.49 million last year as security worries kept visitors away.
  • The poor performance of the tourism sector in the second quarter of the year slowed down economic expansion to 5.8 per cent compared to 7.2 per cent in a similar period last year.
  • Most attacks in recent years along Kenya’s coast have been claimed by the Somali Islamist group al Shabaab, including the killing of at least 65 people in Lamu in June and July.

Simultaneous dawn attacks on Mombasa’s Nyali Army barracks and an Administration Police camp in Malindi on Sunday look set to dim the quick recovery of Kenya’s tourism sector.

Big brother loses as court battle for Naivas ends

Corporate News
Naivas Supermarket branch at Section 58 Estate in Nakuru town. PHOTO | SULEIMAN MBATIAH
Naivas Supermarket branch at Section 58 Estate in Nakuru town. PHOTO | SULEIMAN MBATIAH 
By WANJIRU MACHARIA
In Summary
  • The High Court found that Newton Kagiri Mukuha has no stake in the retail chain, having run down all the stores he inherited from his father.
  • The court made the decision in a case in which Mr Kagiri had objected to the sale of a 50 per cent stake in Naivas to South African retail chain Massmart, claiming that he was entitled to 20 per cent of the sales proceeds as part of his inheritance.

Newton Kagiri Mukuha, the eldest of the three brothers who have been fighting a bruising battle for control of Naivas Supermarkets, was the biggest loser when it all came to a close last Friday.