intel industry county pursuits trends - KCB Group

TRENDS

INTEL

INDUSTRY

COUNTY

PURSUITS

FDI OUTLOOK BRIGHTENS

BREXIT

KCB BANK FUNDS HOTELS’ BOOM

WAJIR’S FIRST TARMAC ROAD

THE SHAZA CLUB Not for sale

Corporate Magazine | Oct - Dec, 2016

Crown paints Kisumu red How first tarmacked road is transforming Wajir

Narendra Raval

MAN OF STEEL

Devki Group CEO on the journey to a multi-billion shilling empire

Focus on the hotel industry

BANK

KCB APP, as convenient as you want life to be. Download the KCB App from your app store to enjoy a variety of exciting financial and lifestyles services including mobile banking, the latest news, forex rates, NSE stocks prices and so much more For more information, visit www.kcbbankgroup.com

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Regulated by the Central Bank of Kenya

11 VW arrival in Kenya boosts FDI portfolio

Nairobi viewed favourable by investors looking for a gateway to East Africa’s 400-million people market

26 A dash of colour

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Radisson Blu makes a splash KCB Bank’s Sh5 billion loan to hotel developer is tranforming Upper Hill as the face of Kenya’s financial discrict

Stay. Dine. Meet. Join. The Shaza Club You can own a piece of this paradise in the North Coast

16 Rakesh Rao explains how from the Kisumu plant, financed by KCB Bank, Crown Paints can use Lake Victoria to send products to Mwanza and use the road to transport our products to Rwanda and Uganda

Watching the Lions having bufallo steak for breakfast at Ole Sereni Four men are sitting in a lounge bar. They are about to make a decision that will transform the hospitality industry in Kenya

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How first tarmac road is transforming Wajir According to Wajir County, majority of the 700,000 residents had never seen tarmack before. That is now history for this north eastern town

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EDITOR’S NOTE INTEL

INDUSTRY

COUNTY

PURSUITS

BREXIT

KCB BANK FUNDS HOTELS’ BOOM

WAJIR’S FIRST TARMAC ROAD

THE SHAZA CLUB Not for sale

A bold new Venture

TRENDS FDI OUTLOOK BRIGHTENS

KCB Corporate Magazine | Oct - Dec, 2016

Crown paints Kisumu red How first tarmacked road is transforming Wajir

Narendra Raval

T

Our intention is to guide you in carving the appropriate niche for your business and ensuring that your business flourishes, as it should

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here are two things about firsts; one is that they are sacred and two is that we should never run out of them. KCB Venture is one of our many firsts and as such, we take great pride in welcoming you to our newest initiative. This is the ideal magazine for you if you are looking to get ahead in the world of business and great banking partnerships. KCB Venture offers fresh insights to keep you in touch with all key areas of economic drivers. These insights will help you keep ahead of the pack, give you unvarnished access to your peers and present you with a bird’s eye view of the business landscape. Our intention is to guide you in carving the appropriate niche for your business and ensuring that it flourishes, as it should. Our brand purpose is an excellent representation of our commitment to you. In this magazine, we have placed special emphasis on cementing our relationships in ‘simplifying your

world to enable your progress.” Which brings us to the two propositions at the core of this initiative. We believe our success is based on the achievements of our clients and in doing so, raises the profile of business partnerships in the country. It’s time to tell the stories and in particular each client’s unique niche in the marketplace. Our first issue centers on Narendra “Guru” Naval - Man of Steel. His story is full of inspiring nuggets, from his humble start in Gikomba to establishing himself as one of the most successful businessmen in Africa. He has ventured into aviation, cement manufacturing and is now embarking on a huge project to generate electricity from geothermal. We have also spotlighted partnerships in the hospitality industry. Radisson Blu as you will read is a world-beater. It started off as an idea to put up apartments and metamorphosed into what it is today. Ole Sereni is another client of KCB Bank that has positioned itself as a business hotel in the city. Guests will occasionally wake up to the sight of hungry lions having a buffalo for breakfast, barely four kilometres to the CBD. And how about being a part of history by bringing the first tarmac road in Wajir County? Locals are known to take the long walk from the dry interior to get a feel of tarmac under their feet. Further in, we have other stories touching on the market of use to you and told in great quality by a top-notch editorial team. Welcome aboard and enjoy the read.

Editor in Chief

MAN OF STEEL

Focus on the hotel industry

Devki Group CEO on the journey to a multi-billion shilling empire

KCB Group Head of Corporate and Regulatory Affairs Judith Sidi Odhiambo KCB Group Marketing Director Angela Mwirigi KCB Bank Kenya Marketing Brand Manager Charity Wanjau KCB Group Corporate Communications, Kencom House, Nairobi Tel:+254 (20) 3270199 or +254 (20) 2229685 www.kcbbankgroup.com Facebook: KCB Group Twitter: @KCBGroup Instagram: @KCBGroup Give us your feedback at: [email protected] or [email protected] KCB Venture is published for KCB Group by Oxygène MCL [email protected] www.oxygene.co.ke Editor in Chief Judith Sidi Odhiambo Sub editors Mutahi Mureithi, Mugumo Munene, Nick Wachira Contributing writers Biko Jackson, Nyambega Gisesa KCB Venture is available at all corporate branches and at select hotels and businesses in Nairobi.A digital copy is available free at venturemagazine.com. ©No part of the contents may be reproduced without prior permission from the publishers. All advertisements and noncommissioned texts are taken in good faith. While every care is taken to ensure accuracy in preparing the magazine, the publisher and KCB Venture assume no responsibility for effects arising therefrom.

OPINION

Growing Business Through Partnerships Nairobi viewed favourable by investors looking for a gateway to East Africa’s 400-million people market By Moezz Mir

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dentifying the right strategic partner to help a business grow and succeed is no easy task. It is a labour of pain, since partnerships are anchored on mutual trust, finding synergies between the two parties, and essentially settling on the right mix of attributes that will grow the business without creating friction. Companies therefore need financial partners who understand their goals and can help achieve its objectives. Building and fostering a relationship with a business partner can make all the difference in its future success. What is then required of the ideal business partnership is the application of expertise and a unique set of skills to help build a strong strategy and offer honest alternatives about what they can and cannot do for a company. Without having the relationship framework from the beginning, there is all the likelihood that the business will be adversely affected. As with any new venture, it’s challenging to find the right fit in a strategic partner. That is why KCB Bank strives to build and grow relationships with its clients right from the start. KCB Bank has stepped in to play an important role in helping suppliers and other service providers solve their business challenges. By providing tailor made financial solutions, the bank has earned the stripes over decades of relevant experience in the industry as a trusted and reliable financial partner. Regardless of the industry in which your business operates, having an ally on your side in the form of a strategic partner will push your business to the next level. A strategic alliance will give you a competitive advantage and an opportunity to access a broader range of resources and expertise. This means that the partnerships we create offer clients distinctive skill sets and infrastructure access that are above the competition. 5|

For us, successful partnerships and alliances rely on the principle that the work involved in maintaining a partnership, and the benefits from the alliance are equally spread, in a mutually beneficial way. It has been proven that the best results from a strategic partnership generally occur when each partner delivers excellence in service areas that are different but related to what the other party brings to the table. That way, there is a play of strengths and expertise on the table for maximum utilization. However, not every detail of an operation can be planned for, and that the success of an endeavor depends on the amount of trust and communication between the parties. At KCB Bank, we are keen on shared prosperity that will require unprecedented efforts by all developing economies in the region to unleash individual sector-led growth. This reaffirms the Bank’s commitment to supporting entrepreneurship as a key driver of growth and development. Entrepreneurs have long been the backbone of local economies, and, by providing new solutions to old development issues, financial institutions can assist in positioning them as key drivers of sustainable and inclusive growth. We as an institution have a significant role to play in unlocking economic growth potential and accelerating growth and development. The efforts required will not be trouble free, but they are essential if Africa is to strengthen its competitiveness in a challenging global economy.

“By providing tailor made financial solutions, the Bank has earned the stripes over decades of relevant experience in the industry as a trusted and reliable financial partner.” Moezz Mir

The Writer is the Director, Corporate Banking at KCB Bank Kenya |5

TRENDS & INTEL KCB M-PESA Digital cash

World goes cashless

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ccording to the third Annual Digital Money report released in 2016, a partnership between Citi and Imperial College of London, emerging markets governments have a big role to play in entrenching the drive towards a cashless society since up to two-thirds of state disbursements are still done through cash or cheques. Citi estimates $150bn could be saved globally every year by digitising only a quarter of The abundancy of these payments, by cashless payment eliminating the cost of systems in the region cash transactions and has also had a positive reducing fraud. effect for many who Another $150bn prefer the convenient annually could be saved alternative method of if only a quarter of retail payment. payments were digitised, while up to $100bn could be saved through digitising a quarter of SME collection transactions. Ideally, traditional means of trade would The number of naturally advance customers the KCBwith the course of this Mpesa platform has technological revolution. attracted since inception. Growing use of financial The platform disburses technology is enhanced betweeh Ksh20 million by various companies and Ksh 30 million daily. looking to reduce the use of traditional cash exchange. To advance the efficiency of their economies, various countries have also turned to cashless systems. South Korea is well known for its high preference use of cashless technology. According to the Korea Times, “The Bank of Korea is planning a “cashless society” by 2020. If a shopper buys a 9,500 won item and pays with a 10,000 won banknote, for instance, the shopper will be credited 500 won to his or her prepaid card instead of getting a 500 won coin in change.”

7m

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12bn

KCB MPESA is a revolutionary mobile solution to the unbanked, enhancing the financial inclusion agenda of the bank.Latest statistics show that at least 40% of the loans processed through KCB MPESA are below Ksh 500 and 57% are below Ksh 1000. Over the last two years, a total of Sh12 billion have been disbursed on this platform.

QR CODES Visa has launched its mVisa QR code-based mobile payment service in Kenya. With mVisa, consumers can directly access all of the funds in their bank accounts to pay merchants or individuals. Merchants will provide a QR code that will have their payment details.

NFC Near Field Communication (NFC), goes way beyond making payments using smartphones. After all, there are also many credit and debit cards which contain NFC chips. These speed up POS payment processing by enabling smaller amounts to be paid quickly and easily without requiring a PIN or signature. After launching the payment application on your phone, the phone is tapped on the credit card terminal and a connection is made using NFC. From there, the payment finishes processing the same way it would in a traditional credit card swipe transaction.

Facts: Agriculture contributes about 26% of the country’s GDP Agriculture employs about 75% of Kenya’s population. Agricultural produce exports account for nearly two thirds of the total domestic export 100,000 - the individual number of youth and women KCB Group has committed to funding in the agricultural sector

INDUSTRY

KCB Group commits to fund farming

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rguably, every person on the African continent has either grown up on agriculture or has been educated on agriculture - an indication of the importance this sector holds in our lives and the

economy. The sustainability of livelihoods is dependent on the bulk of investments made. Subsequently, an enormous multiplier effect is washing over the value chain (from the farmer, to the seller, to the consumer then to the economy). In an effort to enable farmers transform their farming practices from subsistence farming to commercial businesses through financial inclusion, KCB Group committed Kshs 35 billion (US$ 350 million), 5 percent of their lending book, towards lending and capacity building in the agricultural

Ksh20bn

sector over the next five years. This funding is expected to impact the lives of more than two million farmers including 100,000 youth and women who will now have access to affordable credit facilities. Furthermore, the partnership between KCB Group and MasterCard Foundation will see the establishment of a Kshs 3 billion (US$30M) program that allows small holder farmers access to credit facilities and market information through their mobile phones in Kenya and Rwanda. Additionally, the partnership has seen the Bank also commit to spending $200 million (Kshs.20 billion) in credit to farmers under the programme dubbed KCB MobiGro, manifesting its commitment towards supporting the agricultural sector in the region. By providing accessible funding coupled with training opportunities for the smallholder farmers and pastoralists, the bank aims to drive further growth and build on the strength of the sector seeing the significant and immediate impact it has to our country.

The amount that KCB Group has committed in credit to farmers under the programme dubbed ‘Mobigrow’

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TRENDS & INTEL NEW HEIGHTS

Redefining Nairobi’s skyline

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pcoming KCB Bank Plaza has been recognised as the leading commercial building in Kenya and the region by a panel of experts. The panel consists of pioneers in the architectural field included Shamla Fernandez from Kenya, Janfrans van der Erden from the Netherlands and Dr. Allan Kenneth Birabi from Uganda. Announced earlier this year, the Plaza is celebrated by the association for its sustainability efforts. The structure contains a natural ventilation system that maintains a zero dependency on automated systems for cooling support; instead, the structure is supported by the sky courts and atrium design.

“To enhance day lighting, there is extensive use of light reflecting metallic silver finish on the solar shading fins, use of high light transmittance glass and louvered horizontal shading.”

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450

The KCB Plaza is a 21 storey building including a car park that can accommodate 450 vehicles on five parking levels

The striking design of the aluminum shading fins provides a natural mechanism to reduce indoor temperatures. Innovative accents are pronounced throughout the Plaza including an apparatus that can harvest rainwater and treat it. The Plaza preserves the theme of modern design using solar power beams to reduce electricity costs. Construction began in December 2010 and concluded in 2015. Located in the fast-developing financial district in Upperhill, the Plaza is in the company of Britam Insurance, UAP Insurance, the World Bank and Nairobi Hospital. The unique capabilities of the Plaza to express pioneering design while using environmentallyfriendly techniques makes it a real standout in the Kenyan market.

CLIMATE CHANGE

Cleaner energy: leading from the front Kenya is shaping up to be a distinct leader on the global stage in clean energy. The country is on track to become the largest producer of geothermal energy on the African continent by the year 2022. Geothermal energy is classified as clean, sustainable energy that is produced from heat sources from the earth, including magma and hot rocks. The government outlined a longterm strategic goal in the Kenya Vision 2030 to provide nearly 70 percent of Kenyans with renewable energy. Currently, the economy relies on traditional sources including wood fuel and other biomass that account for 68 percent of the total energy consumption. The country is aiming to diversify its sources of energy to advance and urbanize the economy. The increased use of green bonds or funds aimed to back projects that support green initiatives, can enable support clean energy, and as a result, source for more long-term capital for greener investment. Green bonds as an attractive investment portfolio are increasingly becoming popular.

Key country indicators IN THIS ISSUE of KCB Venture we looked at some growth indicators and trends. We have also looked at global trends to put things in perspective. Last year, the global slump in oil prices affected oil exporting countries, though for oil importerts like Kenya, it was a blessing in disguise. In fact, the generally stable inflation rate was driven by the low oil prices among other drivers. Electricity production continued to be stable, with geothermal posting good growth further supplementing the government’s drive towards clean energy.

Quantity MT

Price Ksh/Kg

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EU POLITICS

1 How Brexit will affect Kenya

J

une 23rd 2016 marked the day that Britain made an official exit from the European Union - a day that will forever go down in history. This decision caused widespread panic, especially among the African nations, due to their huge reliance on Britain. For Kenya, one of the greatest impacts Brexit has had is on the flower industry with more than a third of all flowers sold in Europe coming from Kenya. A butterfly effect has unsettled the market owing to the fact that UK is the second largest buyer after Netherlands. Despite all these setbacks that resulted from the Brexit, all hope is not lost.

Ksh23bn 10 |

A set of agreements between regional African blocs and the European Union, as well as between African countries themselves have and will curb the negatives. A solid example is the Tripartite Free Trade Area Agreement that creates a free-trade zone stretching from Cape Town to Cairo, covering 26 countries and representing almost half of African Union member states. Brexit could also possibly result in fairer trade deals for Africa, both with Britain and the EU. But until Britain’s post-Brexit trade policy is established, it is not possible to assess how progressive it may be. A slightly debilitated EU however, may be forced to compromise more, enabling African countries to secure fairer deals. For the UK and its African Commonwealth partners, stronger trade relationships are mutually beneficial. British officials have suggested that African farmers could benefit in any new trade deal with the UK because they could sell their produce at rates that would be attractive to the UK market. For Kenya and South Africa, whose roses and wine respectively are popular in the UK, Brexit could mean an end to the restrictive Common Agricultural Policy (CAP). Finally, the pound is not so sterling anymore. As of September 2016, buying the pound currently stands at Kshs 131.34. This is good news for importers seeing that the exchange rate has drastically plummeted. The bad news is that exporters will earn less in Kenya shillings!

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3

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The amount Kenya exports to two of the biggest European destinations, the UK and the Netherlands. Trading statistics for the first quarter of this year show that the two EU states together accounted for 18.3 per cent of total exports.

TRENDS & INTEL TRANSPORT

Lightening the Load for Nairobi

FDI

VW arrival in Kenya boosts FDI portfolio Nairobi viewed favourable by investors looking for a gateway to East Africa’s 400-million people market

A light rail system will be constructed in Nairobi to ease congestion. The light rail system will run along nine major populated suburbs not supported by the current transit structure. Included in the nine suburban areas are stations in Ruiru-Thika, Juja Road-Kangundo, Jomo Kenyatta International Airport-Athi River, Lang’ata Road-Karen and Upper Hill-Ngong. The rail system will also include stops along the Eastlands area including Kabete-Kikuyu, GigiriLimuru and Outer Ring Road. It will connect the nine Nairobi suburbs to the city center, which will end at the Nairobi Railway Station in the Central Business District. The project, estimated to cost $140 million, will be supported by the wider Metropolitan Mass Rapid Transport System (MRTS). A recent survey of Nairobi says that the city contains the world’s fourth most congested roads. Additionally, the Kenyan government has estimated that traffic jams cost $578,000 a day in lost productivity. The MRTS will aim to provide a city-wide heavy rail, light rail and rapid bus transit to ease costs and congestion rates. The cost of the project will be financed by various private investors.

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ar maker Volkswagen is the latest major entrant into the Kenyan market as the country continues to boast of rising foreign direct investment arriving on its shores. Volkswagen is expanding its commitment in Africa with local production of the Polo Vivo in the Kenyan town of Thika near Nairobi. According to the German automaker, the project which will be jointly realised with local firm, DT Dobie, will be Volkswagen’s third production facility in Africa – alongside the South African factory and a local production facility in Nigeria. It is planned to build up to 5,000 units of the Polo Vivo per year at the plant operated by Kenya Vehicle Manufacturers (KVM) from 2017. “We are taking the successful Polo Vivo from South Africa to Kenya to leverage the enormous growth potential of the African automobile

market and participate in its positive development. This compact model is the best-selling car in the SubSaharan region – so it is the ideal entry model for the promising Kenyan market,” said VW’s Thomas Schäfer commented at the signing ceremony. “With this move, we are strengthening the brand’s overall position in Africa and taking an important step towards expanding our commitment in the region,” Schäfer continued. During a visit to State House by the VW team, President Uhuru Kenyatta said: “The investment by the Volkswagen Group in Kenya is a key milestone in my administration’s determined push to grow the manufacturing base and industrialise the nation.” Kenya is one of Africa’s emerging markets. The country plays a prominent role among East African nations and with a GDP of some US$ 63 billion, it is one of the strongest economies in East Africa.

Ksh57M The Kenyan government has estimated that traffic jams cost Kshs57 m a day in lost productivity

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COVER STORY

‘Guru’ Narendra Raval, the

Man of Steel

Devki Group Chairman reveals how KCB Bank grew with him during the group’s formative years

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COVER STORY

Stepping into the spacious reception of Devki Group of companies in the dusty little town of Ruiru, one is met by an antiseptic environment and tranquility that belies the reality outside the offices. the office complex is a case A large TV screen study in good taste; ambient welcomes you to the head lighting covers the entire office of the largest steel floor; the furniture is what factory in the region. On you find in those expensive the screen is a looping catalogues while the walls are documentary on the journey decorated with art and rather the company has taken to pricey looking wallpaper. become the behemoth it is The floor is bedecked with today. Donning the walls are the most expensive Italian pictures of the Chairman, marble, a turquoise blue Narendra Raval in various there, a gray and blue tile poses with Very Very thither. Yet, he wasn’t born Important People. with a silver spoon. There is one with former “I started off at Gikomba President Daniel arap Moi. in the cheapest store There is another with we could get Narendra Modi, India’s Premier who, “I started off at because nobody during a recent Gikomba in the was interested in state visit to Kenya, cheapest store the area as it was considered a very squeezed some we could get time to visit his old because nobody unsafe place,” says friend Raval, or was interested the former priest. Having seen a Guru as he prefers in the area as it being referred to, in was considered gap in the hardware business, he took a his house in Nyari a very unsafe plunge by sinking estate. The other is place,” his savings in buying that of Raval with and reselling steel. The Mwai Kibaki, Kenya’s Kshs 3,500 shillings a month immediate past President. in rent for 5,000 square feet The most telling picture was considered steep for the however is that of Guru time and place but Raval was adjusting Uhuru Kenyatta’s undeterred. It was a tough tie right where Raval’s cement time for him and the country and steel companies thrive. in general. During the late “The President is my friend eighties and early nineties, and we have known each Kenya was going through the other for a long time,” says Raval as he ambles around his labour pains of the advent of multi-partyism and the massive office. And it is a very epicenter was usually the area big office. around Gikomba. The entire top floor of

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COVER STORY

“It was very nice of KCB Bank what they did to me. That’s why till today, I tell my board of directors that we will not ever leave KCB Bank because they understand the Kenyan market, they understand the people, and the business way of Kenya. “

4,000 The number of employees employed directly by the Devki Group. Thousands more are employed indirectly.

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“All the riots were starting around where our shop was, on Kombo Munyiri road. We endured a lot of tear gas”, says Raval rather mistfully. He started off buying steel from the existing mills and within five years, his store had become the largest steel hardware shop in the area. Having sold steel and seen the margins manufacturers were making, Raval decided to backward integrate by venturing into manufacturing. At the time, there were only a couple of steel rolling mills in the country that basically had a

tight hold on the market. Raval found a site in Athi River, 30 kilometres from the city centre, where he planned to make his dream a reality. “We bought 25 acres at Sh35,000 an acre. At the time, the whole place was nothing but a thick bush. Only Kenya Meat Commission had established in the area,” he says. Having bought the land, Raval was left penniless. He did not even have enough money to put up a boundary wall. “I used a have a pick up Toyota KXU 905 (today I don’t remember the number plates

of any of my cars but this one I remember which means whoever stays with you in difficult times you will never forget them) that I used to ferry stones from the quarry for building the wall”, he says. After the fencing project, Raval approached KCB Bank for financing to set up his steel rolling mill. He had never done a business plan before, but he gave it a shot. It was shy of the bank’s expectations and as a result, he hired an expert who helped him prepare a proper plan. A KCB Bank manager, whom

COVER STORY

he fondly remembers as Mr. Ndambuki, kept encouraging him during the loan application process. Finally, he applied and received US$100,000 (at the time equivalent to Sh36 million) which he used to purchase his first steel rolling equipment. Production would start after KCB Bank gave him a letter of credit to import the raw materials needed to kick off the business. But a setback was to strike immediately he started production. The global price of steel not only crashed spectacularly, but a couple

of local competitors, keen on running Devki out of business, ganged up by undercutting him on the price. Raval’s steel was piling up in the godown and the market was flooded. “For five months, I could not pay salaries for my employees but they stuck by me. It was very nice of my bank and the Kenyan workers, some of whom are still working with me, to stick by the company,” says Raval. To his relief, KCB Bank did not push him for repayments but instead restructured

the facility until the market recovered. Fortunately, fate was on his side. When prices recovered, the only steel available in the market was from Devki; all the competitors had cleaned out their stocks because they had been selling their product cheaply to force Devki out. “I woke up one day and I was the only one with steel in the store. I got a good profit margin at that time because I had the goods and nobody else had it”. He made a cool US$1 million in profit. Today, Devki is the largest steel firm in the region, with a production capacity of a quarter million tonnes per year spread over several factories. The firm employs over 4,000 employees directly and tens of thousands indirectly and, according to FORBES magazine, Raval is one of the richest men on the continent, with a net worth of some US$400 million. The Devki group has a turnover of Kshs65 billion according to FORBES. The company makes over 300 items, ranging from shoe nails, roofing sheets, steel bars, wire mesh, barbed wire among others. The company also makes its own oxygen on site. “It was very nice of KCB Bank what they did to me. That’s why till today, I tell my board of directors that we will not ever leave KCB Bank because they understand the Kenyan market, they understand the people, and the business way of Kenya. I have stopped doing business with many other banks, but I will never leave KCB Bank,” says Raval.

BRANCHING OUT

Devki’s other ventures The Devki Group has also invested heavily in cement, aviation and energy, partly through financing from KCB Bank Kenya. The group owns National Cement Company, the makers of the Simba Cement brand. Raval says that all he wanted was to act as a disruptive force in the industry and sell his products below the prevailing prices. Today, Simba sells for Kshs575 a bag compared to the competition’s Kshs675.

$400m Narendra Raval net worth (Forbes). “I decided that I will not only invest for profits, but make cement affordable to millions of Kenyans,” says Raval. “I feel KCB Bank is my own bank. The bank has never let me down in the thirty years that we have worked together. I can put my hand on my heart and say that I will not go wrong with this bank and they will stand with me in good and bad times.”

Do you have a dream? Contact : +254 (20) 3270199 [email protected]

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Watching the Lions feast at Ole Sereni

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INDUSTRY FOCUS: HOSPITALITY

Four men are sitting in a lounge bar. Which bar isn’t important. What’s important is what is about to transpire in that bar. As lore goes, the four gentlemen are knocking back scotch and bourbons and avoiding the complimentary peanuts because they want to stay in shape. You see, they are golfers, these men, albeit amateur golfers. They often do a round of golf together in Kabete and their wives exchange food recipes. Once in a while, they take their children for a holiday somewhere where they kick about a ball on a green lawn, or build a castle on a beach. So yes, you could say they are great chums. This is almost 15-years ago. The guy with the white socks is Kul Bakoo, who you might know as the owner of Kul Graphics in present time. Next to him is Bobby Jandu the owner of Allied Plumbers; they do a lot of plumbing, air conditioning, water treatment and all. The one holding the glass with his left hand is Mso Dave Bola; he’s based in Zambia now, running an insurance business. Lastly there is the tall one with a Godfather sneer. That’s Nazir Noobin. He, together with Raju started CopyCat

in 1981. It blew the roof: 32 years later and CopyCat is now a hundred million dollar company. What had previously happened was that the American Embassy, which bought the building they were now deliberating upon, after the bombing of their embassy in 1998 had just moved to a new building in Gigiri after selling it back to Kul Bakoo for a few hundred million shillings. The three gentlemen had pooled resources to help Bakoo buy it back. Then they had tried to sell it off with no success. It was a fortress, the place; steel, reinforced walls, blocked windows, boulders on the side facing the National Park. They didn’t know what to do with that 40,000sq ft building. Someone had swirled his scotch and said, “Let’s do a hotel.” There were chuckles of cynicism. Nazir sipped

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Extent of KCB Bank financing They knocked on KCB Bank’s door and asked for Sh650 Million loan. The Bank obliged. They signed up a management contract with a company from India called Sarovar Hotels after opening the doors to the hotel on the 1st of November 2009. KCB Bank also provided a dollar based facility ($21 million) for phase two of the project. “One of the basic things is that KCB Bank agreed to give us the money in US Dollars which was very appropriate for us in terms of offering a bit of a relief on the way our projections would work.”

650m The first loan from KCB Bank for Phase one of the Ole Sereni hotel project

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his Johnnie Walker Black and groaned: none of them had any hotel experience. What did they know about running a hotel? This was mad, gentlemen. But they are businessmen, selfmade men, risk takers, their hearts bled for adventure and enterprise. So just like that they agreed to start a hotel. Ole Sereni Hotel was born. They knocked on Kenya Commercial Bank’s door and asked for Sh650 Million loan. The Bank obliged. They signed up a management contract with a company from India called Sarovar Hotels after opening the doors to the hotel on the 1st of November 2009. They only had 45 rooms for a start. The gym was not

ready, the salon was not ready, the specialty restaurant was not ready. Things didn’t pick immediately but pick they did. Now they are at 84% bed occupancy and almost about 96% on revenues versus budget. Does having four directors who are friends coming to run a business complicate

things? “Not at all,” Nazir stresses. “The relationship between us four people is a very strong relationship. We’re from different backgrounds, different religions but before this, we’d already known each other for 30 years. We’re friends, yes but when it comes to business, it’s a totally different ball game,

INDUSTRY FOCUS: HOSPITALITY we all respect each other in terms of what we are good at. So everybody respects each other’s contribution.” Early this year, a pride of lions killed a buffalo right next to the watering point a stone-throw away from the hotel. For almost a week, the lions didn’t move from the kill. Guests would wake up daily to find them lolling about the watering point, eating and napping and giving everybody a front-seat show. That is one of the charms of Ole Sereni Hotel, this ringside seats to the spectacle of Nairobi National Park. From the Eagle SteakHouse you can sink into your rich leather chair and feast your eyes on the park. Or at sunset, a glass of cognac in hand, sit at the Water Hole Snack Bar and watch the sun paint the park orange, and then, red, with a sharp paintbrush of warmth and light. However, the turbines of Nairobi’s enterprise never sleeps. Hotels are coming up every month, some positioned facing the park, threatening to bite Ole Sereni’s pie. They seem unperturbed. Rather, they are unperturbed. “We are not focused on what others are doing,” Nazir says, “We are focused on developing a sustainable brand, something that will stand the test of time

as a beacon of hospitality.” To prove their point, they went back to knock on the door of their only friend who has held their hands since that day the dream was born; KCB Bank. The bank has always tailored their financial services to what they need. They told the bank they wanted to embark on a bigger project: Ole Sereni 2:0, or just OS2. The project entails the expansion of the existing hotel with an additional 154 rooms, three large conference rooms with a capacity of 800 clients and three basement parkings with a holding capacity of 500 vehicles. They will have to employ 150 more employees. The project is meant to be completed in two years time. There is excitement and enthusiasm all around. Ole Sereni is taking it to the next level and with it comes great hopes. When you walk through the foyer of the hotel and up one of the winding staircases, you will see a golden sculpture of a leopard. It’s more than a decoration. It’s what Ole Sereni seems to embody; the resilience and stealthiness of a leopard. The hotel will not make noise, but it gets its prey all the time. Do you have a dream? Contact : +254 (20) 3270199 [email protected]

HOSPITALITY

Ole Sereni partnership with KCB Bank

“One of the basic things is that KCB Bank agreed to give us the money in US Dollars which was very appropriate for us in terms of offering a bit of a relief on the way our projections would work.” Bhakoo Co-Director at Ole Sereni.

Ole Sereni has grown over time and continues to prosper even as many hotels open shop in Nairobi, competing for the same pie. They are currently embarking on a project called OS2, or Ole Sereni Phase 2. The project entails the expansion of the existing hotel with an additional 154 rooms, three large conference rooms that has a capacity of 800 clients, three basement parking with a holding capacity of 500 vehicles. The project is meant to be complete in two years’ time.

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Radisson Blu m

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makes a splash KCB Bank’s Sh5 billion loan to hotel developer is tranforming Upper Hill as the face of Kenya’s financial District Hotels are all about the experience guests carry home and not the silver fork and knife laid out on the table, and certainly not the brick and mortar that make up the superstructure. Mr. Jens Brandin, Radisson Blu’s Upper Hill General Manager knows this just too well; guests come for a reason other than food and a bed. They are looking for an experience. He says it and does it with an African ring as though he were echoing the words masterfully written by celebrated novelist Chinua Achebe in his classic ‘Things Fall Apart’. The towering Jens Brandin marched into what is perhaps Nairobi’s most modern hotel reception with the gait and confidence of a maestro in front of an accomplished orchestra on a busy August mid-morning. He was effortlessly fitting into four roles all in under the three hours the KCB Bank media crew was in the hotel; the weight on his shoulders of hosting three Heads of State and a Prime Minister, time for our media crew, chaperoning a highpowered diplomatic team on a tour of the hotel to finding the time to keep up with his maintenance staff. He gave not the slightest indication that on his shoulders was the burden of hosting the Heads of State and numerous VIP delegations; that actually the hotel was running at full capacity. “When you have a full hotel, the work happens before. This is actually the fun

part,” he said. As you enter the hotel lobby, you are met by Nairobi’s roomiest hotel reception, with its understated but elegant African theme in the lobby and throughout the open spaces. To the right hand is a corridor leading down to an array of shops, where the high-end tourists or business clientele indulge in a spot of retail therapy between business, a work-out in the gym, pampering sessions in the spa or a minisafari to the Nairobi National Park to the south, a 20-minute drive away. The lobby with its comfy sets of sofas eases out to the Chop House where you can start a meal with grilled vegetables and cured meats served on planchas (hot metal plates), and then enjoy the show as one of the hotel’s skilled servers carve barbequed meat at your table while watching the rest of an authentic African meal being prepared in the open kitchen. Alternatively, you can branch out to the Larder restaurant and order a plate of an international favorite, or try something distinctly Kenyan. The Larder is open all day with its alluring aesthetics enveloped in warm lighting and charming ambiance offering a top-end menu from slow-roasted local meats to traditional fish stew. Or further out on the southern verandah at the Al Fresco Pool Bar & Grill where guests can dine at the poolside with a glass of wine while relishing a menu designed by nutritionists to blend healthy options with local cuisine, while enjoying

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KCB Bank believed in the dream

Michael Kairo wondered just how to turn the multi-million dollar dream into reality. “As far as I know he approached many banks in Kenya and a lot of them, obviously foreign banks, were not able to see the vision he saw,” said Mr. Brandin. “But he was fascinated by the flexibility and partnership that he received from KCB Bank.” The bank bought in and financed him to the tune of Sh5 billion, creating what has become one of Kenya’s top hotels.

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the Nairobi breeze. Not to mention that the history of the city, traditional homeland of the Maa-speaking people, is captured in Maasai shukas placed on the backs of selected chairs at the Al Fresco, to give the feel of cake sprinkles on white icing. Or the three Maasai statues towering above the lobby next to the bank of elevators, each of which has a glass rear so that guests can relish a breathtaking bird’s eye view of the lobby on their way up or down, to or from their selected quarters. It seems to give a new meaning to opulence as Nairobi’s jewel in the crown when it comes to the upscale,

modern five-star hotels. “I think we’re definitely one of the largest hotels, certainly one of the most modern in terms of layout and flexibility. From day one, our meeting rooms have been busy” said Mr. Brandin with under-stated emphasis. The Radisson Blu is in a class of its own: It brings to life the upcoming Upper Hill Financial District, with stunning views of the city. It has a good view of the city to the north and Nairobi National Park to the south. The hotel boasts 1,400 square meters of space for events. “We have amazing views of the national park on one side

and the CBD on the other side. You really notice that you’re in Upper Hill when you look to the north,” said Mr. Brandin, still looking delighted by the stunning location of the hotel two years into the job. The meeting space with 12 rooms is versatile and offers a possibility of hosting a small party for friends or a large gathering in the 590-squaremeter Mount Kilimanjaro Ballroom, which can accommodate up to 700 guests for a reception. The meeting space is outfitted with features like free high-speed, wireless Internet access and state-ofthe-art audiovisual equipment. Even Mr. Brandin knows that this is a coveted location


“We have 1400 square meters of function space, always (in) day light facing south and north. Amazing views facing the national park on one side and the CBD on the other side. You really notice that you’re in Upper Hill when you look to the north,”

for any hotel, not just for its stunning views but surrounded by competition for what will be Kenya’s tallest building in the foreseeable future. In the Upper Hill District, Britam is building what will be the tallest building followed by KCB Bank, UAP Insurance Company and then World Bank. This brings business to within walking distance of Radisson Blu. “I think many of those in Westlands would wish their hotels are situated here,” says Mr. Brandin. The road taken by the hotel has not been smooth at all. The iconic dream that has become part of the more than 1,400 hotels around the world run by the Carlson Rezidor Hotel

Group has long become a reality; it was eight years in the making actually. The outfit that today routinely hosts heads of State – they had four during the Tokyo International Conference on Africa Development (TICAD) held in Nairobi at the end of August – was the brainchild of Mr. Michael Kairu. His initial idea was to build executive serviced apartments on the two-acre property, said Mr. Brandin, until a Danish architect convinced him that the bigger the dream the easier it would be to attract funding. “The Danish Architect suggested that they go big to attract funding … Out of a medium small residential apartment idea it became a big beautiful hotel ….which we’re in now,” says Mr. Brandin, his hands swooshing in tandem with his pronouncement to illustrate the fulfilment of the moment. The dream graduated from the serviced apartments into this magnificent structure that now boasts 271 rooms and a secure more-than-ample 240 parking lots which opened its door to guests in November last year. “When you think about a project that’s been eight years in the making … imagine when you plan for the space, for the layout … you cannot change it from one day to the other. I think we really got it right; the mix between 271 rooms the rooms, standard, superior, suites with the function space…” said Mr. Brandin. Those staying in a Business Class Room or in one of the Suites receive access to the exclusive Business Class Lounge, which serves

complimentary breakfast, tea and coffee each morning and canapés, wine and beer during club hours between 5pm and 7 pm. Just before it all began to come together, there was the elephant in the room; where to get Ksh7 billion needed to bring the superstructure to life, complete with its glamour and glitz. Mr. Kairu and his business partners in Elgon Road Ltd certainly didn’t have it. They drew up a plan and turned to banks with an elaborate proposal on just how to turn the multi-million dollar dream into reality. “As far as I know he approached many banks in Kenya and a lot of them, obviously foreign banks, were not able to see the vision he saw,” said Mr. Brandin. “But he was fascinated by the flexibility and partnership that he received from KCB. Bank” “It’s great to see that there is entrepreneurship and trust because money and banks need to come first before dreams can become a reality,” he added. KCB Bank came in and financed the project to the tune of Ksh5 billion. Mr. Brandin, a German national who’s working for the first time in Africa having worked previously in Europe, is happy that the hotel is up and running and just can’t seem to get enough of the Kenyan spirit. “It’s great to be in a country where you have such a hardworking workforce. We do not have to train our staff how to be welcoming. The staff have this in them,” he says adding, “They have the most amazing natural smile that you can find,

FEATURE

Radisson Blu and the Green Key Taking responsibility for the environment and local community has been an important part of the broader commitment of the Carlson Rezidor Hotel Group to sustainable development for many years. The Radisson Blu Hotel, Nairobi Upper Hill is proudly certified with the international Green Key eco-label. This international eco-label for hotels

1,800 Establishments in 34 countries around the world who are certified with the international Green Key eco-label. currently covers over 1,800 establishments in 34 countries worldwide. It is based on ecological, social and technical criteria that surpass official environmental laws within the respective countries. Green Key aims to raise the awareness of hotels, staff, and clients about sustainable methods of operation and technology and the running of ecologically sound and responsible businesses, thereby reducing resource and energy use.

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I think, anywhere in the world.” The Kenyan spirit fuses well into the theme of the experience that the Radisson Blu team works to offer their clientele – an unforgettable experience different from any other hotel. “Not only the design and facilities but the service. I have worked in many parts of the world. We have our main vision called ‘Yes I Can’. It’s a mixture between a philosophy and a service programme

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… which we try to use to make it right for the guests all the time and really create memorable moments,” says Brandin. “Nowadays, especially in our sector, it is not really about sleep and food. People don’t come to us because they are hungry and tired. We are selling experience.” And he’s full of optimism about the future. “We have elections next year but we have so much positivity. Talk to people who were here

A meeting room like no other

700

The capacity at Kilimanjaro meeting room . The space is outfitted with features like free highspeed, wireless Internet and state-of-the-art audiovisual equipment.

ten years ago and they go wow! What has happened here? I think there’s so much potential here. This is where it’s happening. This is where you’ll see an amazing development in the middle class and so on. We have great local partners and we’re trying to bring the international experience and the synergy which is truly amazing,” he says. And they are putting their money into hosting the weary traveler on holiday or the

“We have two projects in Nairobi; Park Inn and Radisson Blu Serviced Apartments coming up in Aboretum. We also have Kigali coming up. We will have hotels coming up in Kampala, Tanzania and all over Africa really” Mr Jens Brandin, GM Radisson Blu

business executive inking the next deal an experience like no other. And there’s not stopping. “We have two projects in Nairobi; Park Inn and Radisson Blu Serviced Apartments coming up at the Aboretum. We also have Kigali coming up. We will have hotels coming up in Kampala, Tanzania and all over Africa really,” he says.

271

The number of rooms that Radisson Blu offers in three distinct varieties. The hotel also has 240 parking spaces.


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How first tarmac road is transforming Wajir

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COUNTY: ECONOMIC DEVELOPMENT

According to Wajir County, majority of the 700,000 residents had never seen tarmack before. That is now history for this north eastern town

D

ubow Abdi has lived his entire life in northern Kenya. Born 66 years ago 15 kilometers east of Wajir town, one of the oldest hamlets in northern Kenya, he has lived through the colonial period and the village elder has been around long enough to have seen it all. Or so he thought. Mr. Abdi has not travelled that much. He has only managed to visit several towns within northern Kenya, the likes of Habwasein, Eldas and El Wak. But like most people in his village Mzee Abdi had never seen a tarmacked road prior to 2014. So, when the county government announced in late 2013, that it had prioritized the construction of a tarmacked road in Wajir town, he slaughtered a camel for his family in anticipation. On the day that Ogle Construction Company - the first contractor to lay the town’s tarmac - applied the first sealant, the section which protects water from seeping through the foundation of the road, Mzee Abdi, his three wives and eleven of his children literally camped in Wajir town to get a feel of the tarmac. “It’s very funny that we didn’t know that it was not even tarmacked. But, we didn’t care because my wives and my children had never seen a tarmac road before,” he said during an interview in Wajir for Venture. Since that day, almost two years now, Mzee Abdi has made it his business to ferry people from the interiors of Wajir County - one of Kenya ’s largest counties which occupies 10 per cent of the land mass of the country - to see the tarmac. “We started by walking, then started using boda bodas and we now use taxis. I used to charge Sh. 100 for someone to come and see the new road but I lost business when people discovered that you can see, hold, touch and sit on the tarmac road without paying a penny,” he says with a cheeky smile. Mzee Abdi is not alone. According to the Wajir County Government, a majority of over 700,000 residents of the County had never seen a tarmac road before the county constructed the first kilometer in 2014.

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COUNTY: ECONOMIC DEVELOPMENT The vision

Abdi argues that without the input of KCB Bank, the project could probably have stalled. “Due to structural hiccups within the county, we were not getting the required funds flow in time. KCB Bank came at the right time to ensure that we had the finances to carry out the project in the required time,” Ogle Construction MD, Mr. Ahmedsiad Abdi

440

Wajir has a total of 440 km gravelled roads, out of 5,280 km road network. The rest of the roads are unclassified. Up to this year, the county had no tarmac road. However, the county has an international airport in Wajir and 7 airstrips; Habaswein, Khorof Harar, Wagalla, Buna, Bute, Tarbaj, and Diff.

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Wajir Town, established by the British in 1912 as their regional colonial office, is one of the country’s most remote places. It’s a semi arid outback that has never shed off its badhia (rural area, in Somali language) tag. Located almost 700 kilometers from Nairobi, it would take you about three days by bus, if you are lucky. If not, you can spend a week,

sleeping in the open, while mechanics try to bring the bus back to life. Wajir, a dusty and rugged town, is so remote that when the county government put out the advertisements for the tarmacking of the roads, out of the dozens of companies that applied, only one qualified. One of the main reasons why most of the contractors were disqualified is that they did not

even have a clue how the town looked like. Ogle Construction Company, a family owned company that was first started in northern Kenya before spreading to the rest of the country, was the only one which qualified. Registered in 2005, Ogle Construction was the pioneer road construction firm in the former North Eastern Province. The company has

COUNTY: ECONOMIC DEVELOPMENT entered the history books with the Wajir road construction. “I was doing the KwaleLunga Lunga road, a national government project when I saw the advert. I told myself that Wajir is my home. I have to go back and do something for my people because not many of them have the experience, the personnel and the equipment to do that kind of work,” recalls

Ogle Construction MD, Mr. Ahmedsiad Abdi. Despite its vast experience in road construction, building a tarmac road in a place such as Wajir was not a smooth ride. “The County was barely a year old. It had no capacity for such a project. There were no structures, no personnel and exposure and skills to do the project. It was a very young county,” Abdi explains.

As a result of the inexperience, a lot of time was lost in decision making before construction started. “The County officials did not understand that for some of these contracts there are requirements that once you certify a payment it needs to be paid within a certain time. If you don’t, it will have impacts on the progress of the project,” Abdi says. To save the situation, Ogle Construction Company approached KCB Bank, their principal bank for several years, for funding. “Already we had secured the support of KCB Bank. Such a project requires a number of guarantees that must be secured by a bank. These guarantees must be secured by a recognized bank locally. Without this you cannot even execute a contract. But we needed more assistance so as to finance the project,” he says. Abdi says that without the input of KCB Bank, the project could probably have stalled. “Due to structural hiccups within the county, we were not getting the required funds flow in time. KCB Bank came at the right time to ensure that we had the finances to carry out the project in the required time,” he says. Having graduated from a normal regular account holder to a corporate client, Ogle Construction Company further sought asset financing from the KCB Bank. “Our construction equipment is procured through a facility from KCB Bank which is structured based on one-to-one discussions and which they consider based on our requirements. They understand what we want and

How we did it

The deal with KCB Bank In total, the bank financed between 20 to 25 per cent of the Ogle Construction Wajir tarmac project. Abdi says that without the input of KCB Bank, the project could probably have stalled. “Due to structural hiccups within the county, we were not getting the required money flow in time. KCB Bank came on board to ensure that we had the finances to carry out the project in the required time,” he says. Having graduated from a normal regular account holder to a corporate client, Ogle Construction Company further sought asset financing from the bank to be able to acquire the equipoment that was needed for the task.

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COUNTY: ECONOMIC DEVELOPMENT work around that,” he says. In total, the bank financed between 20 to 25 per cent of the Ogle Construction Wajir tarmac project. “Without KCB Bank, we could not be talking about contracts, getting the much needed finances to continue with the project and the necessary equipment,” he says. Ogle Construction Company, constructed the first eight kilometers out of the 28 kilometers that are now tarmacked in the town. Abdi describes building the tarmac road as the most unique experience in his road construction career. “Unlike other urban areas where we have a project and people have encroached on the road and thus it is difficult to relocate them, in Wajir, the residents cleared the roads even before we reached the sections that they had encroached on,” says Abdi with a smile. According to Wajir County Governor Ahmed Abdullahi, the tarmac road has transformed Wajir town more than anything else since independence. “Before the tarmac road, we had only two storied buildings in Wajir Town. We now have at least five storied buildings coming up. We didn’t even have demarcations for the town but the road has now made it possible for us to demarcate the town better,” the Governor said. Construction of a tarmac road, the most unorthodox means of spurring development, has totally transformed the once sleepy and dusty town. Value of property along the

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tarmac has gone up. Dozens of old buildings along the road have come down and are being replaced with modern buildings. There are two new hotels. One of them, the Wajir Hilton Hotel, is already recording a rise in business. A Kenya Medical Training College (KMTC) is almost complete. The county has constructed a Huduma Centre and for the first time in history, you can train as a teacher within the county at the Wajir Teachers Training College. There is even a university under construction. Residents like Shukri Dubow, a 35-year-old watchman who calls himself

Contribution to the economy

500 The number of cars estimated to be operating in Wajir, up from 150, following the tarmacking of the roads

“macho ya town,” have a new moniker for the town. “This is the new Eastleigh,” he terms it.

Like Eastleigh, there is a new swagger in the town. The county recently sounded a warning to donkey owners to “keep off” the tarmac. Residents used to walking can now use taxis. Before the tarmac was done, the local matatu and taxi association estimates that there were about 150 vehicles operating in the town. “We now have more than 500 vehicles. We are excited that soon we might also have a feel of traffic jams,” Abdi Noor, a taxi operator, jokes. Even boda boda operators are not being left behind. “We used to have less than 100 boda bodas operating in this town. Since the tarmac road was done, we now have more than 300 operating,” says Timothy Kamenjo, a 25-yearold boda boda operator. Along the tarmac road, businesses open late after the county government installed 20 floodlights and more than 300 solar-powered street lights to boost security. Wajir now offers an example in road infrastructure development to other counties. “Just the other day, there was a delegation from Mandera County who visited us to learn how they can construct tarmac roads,” Mr Abdullahi says. The tarmac is now a main feature in the reconstruction of the new Wajir that is meant to be a “Gateway to northern Kenya, with a dream to be the affluent, service-oriented capital of Kenya’s forgotten north, and a beacon of hope Do you have a dream? Contact : +254 (20) 3270199 [email protected]

““Before the tarmac road, we had only two storied buildings in Wajir Town. We now have at least five storied buildings coming up,” Wajir Governor Ahmed Abdullahi.

500

The estimated number of vehicles operating in Wajir Town since the tarmacking of the road up from about 150

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A dash of colour

Rakesh Rao explains how from the Kisumu plant, Crown Paints can use use Lake Victoria to send paints to Mwanza and use improved infrastructure to transport products to Rwanda and Uganda

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PROJECT FINANCE

If you take a walk in Nairobi’s Industrial area, you will probably notice Crown Paints’ factory located on Mogadishu Road. Hundreds of men in aprons smeared with different colours of paint are busy doing their thing. It’s a busy place where man and machine form an intriguing combination. A sea of humanity mills around the plant, producing about 1 million litres of paint a year. However, almost two years ago, the company, which is the country’s leading paint manufacturer, discovered that its factory was not optimally serving its business. The company also found that for every tin of paint

transported to distant markets, it was actually transporting 70 per cent water, the amount of water that is contained in a can of paint. Last year, the company decided to open up an automated factory in Kisumu, which could help it solve the inefficiencies. “Kisumu is located at a central place to serve the Western Kenyan market and neighboring countries. From the Kisumu plant, we can use

Lake Victoria to send paints to Mwanza and use the road to transport our products to Rwanda and Uganda,” Rakesh Rao, the CEO of the company, says, from his office located at Crown Paints headquarters in Nairobi’s Likoni Road. The company, which has been in existence since 1958, has 75 per cent market share in Western Kenya serving Kisumu, Eldoret and several other towns in the region. However, the period in

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PROJECT FINANCE

KCB Bank partnership with Crown Paints Crown Paints intends to get more funds from KCB Bank for future expansion at the factory. “Currently, we are holding no stocks. We produce and sell the all paint we make. We will need to build a showroom and hardware for storing the finished goods,” says Rao. The Kisumu factory has assisted in changing fortunes for the company. “In Rwanda, the business has grown by over 100 per cent. In Tanzania, we have just broken even and despite some teething problems in Uganda, we are doing well,” Mr Rao says. For the past four decades, Crown Paints has maintained its reputation as a manufacturer of various paints and paint related products such as internal and external paints, specialized and textured paint finishes, roof paints, floor paints and wood varnishes.

400m The amount it cost Crown Paints to set up the Kisumu plant.

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which the decision to open a factory was made, was a difficult and painful one for the Nairobi Stocks Exchange listed company. To start with, the company was just coming out of a costly expansion in the East African region that had consumed billions of shillings. Secondly, the company had suffered heavily from the exchange rate changes with the currencies in Tanzania, Uganda and Rwanda depreciating by about 50 per cent. The effect was a loss to the tune of Sh. 300million.

To raise capital for the Kisumu plant, Crown Paints approached KCB Bank, through which the paint manufacturer conducts over 80 per cent of its businesses. “We have benefited a lot from the bank. When we approached the bank to finance the Kisumu project, they gave us the best interest rates that were much more competitive,” Mr Rao says. Crown Paints has a partnership with KCB Bank in which they benefit from special discounts and free advice from the paint manufacturer.

“We offer free advice on special finishes, various decorations and paints to use to the bank’s customers who take loans to build property,” Mr Rao says. With KCB Bank financing, the company built the Sh.400 million Kisumu plant. After a few months of operation, the Crown Paints Kisumu factory is already a success. The factory is completely automated and produces 1.2 million litres of paint per month. During the production process, other than when loading the paint

PROJECT FINANCE

manufacturing ingredients, there is no manual intervention. “The cost of operation is lower compared to the Nairobi plant. We only need 20 to 30 people to produce one million tonnes of paint compared to a staff of over 100 at the Nairobi plant. Interestingly, we get the same quantity of paint within two to three hours compared to the six hours or more we could have used in the Nairobi factory. It takes 50 per cent less time to produce the same amount,” Mr Rao says.

He adds that they intend to get more funds from KCB Bank for future expansion at the factory. “Currently, we are not holding any stocks. We produce and almost immediately sell the paint we make. We will need to build a showroom and hardware for storing the finished goods,” he says. The Kisumu factory has boosted the fortunes for the company. “In Rwanda, the business has grown by over 100 per cent. In Tanzania, we have just broken even and despite some teething problems in Uganda, we are doing well,” Mr Rao says. For the past four decades, Crown Paints has maintained its reputation as a manufacturer of various paints and paint related products such as internal and external paints, specialized and textured paint finishes, roof paints, floor paints and wood varnishes. Currently, Crown Paints occupies more than 65 per cent of the premium market share and about 44 per cent of the premium and economy paints market. The company has a net worth of over Sh6 billion and now produces over 5 million tonnes of paint in a month. In 2014, Mr Rao was honoured as the CEO of the Year and Crown Paints as the Company of the Year during the Company of the Year Awards (COYA).

“We offer free advice on special finishes, various decorations and paints to use to the bank’s customers who take loans to build property” Rakesh Rao, CEO Crown Paints


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PURSUITS CLASS REDEFINED

The 2016 Range Rover offers a luxurious experience like no other Prodigious off-road ability You never forget that you’re driving a tall two-tonne, top heavy SUV when you’re behind the wheel of the Range Rover, but the car is more agile than you may expect. It feels precise and inspires confidence in most situations, allowing you to place it accurately on the road.

Superbly comfortable and refined Refinement is one of the Range Rover’s strongest areas. It’s particularly impressive cruising at high speeds, when it does an excellent job of isolating you from the elements, thanks in part to an acoustically laminated windscreen.

Land Rover Range Rover Boot Space You won’t want for boot capacity in the Range Rover. There’s more than enough space for a couple of adults’ luggage and a reasonably hefty baby buggy – or a few sets of golf clubs. At least you don’t have to worry about opening and closing the boot; both the upper and lower sections are electrically powered as standard across the range.

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T

hey say you can never buy class… we beg to differ with this particular notion. Class can indeed be bought, but at a very steep price. What is the first thing that comes to your mind when you see that sleek white expensive looking four wheeler speed past you on the highway? Yes, you guessed it… Class. You know, that vehicle that leaves everyone in traffic questioning their existence. The vehicle that speaks on its own and needs no further introduction. The kind of automobile that automatically sets you apart from the crowd. The 2016 Range Rover. This is not your ordinary car. Unlike the rest, it has its place in both the hearts of men and women alike. Its sleek, curved and proportioned presence serves that exact purpose. This Range Rover model boasts of a 5.0-liter V8 engine that uses a Roots-type twin vortex supercharger to generate 550 horsepower to keep you cruising along Nairobi’s highways at your heart’s desire. In the interest of

your safety, the auto experts ensured that in the event of an unfortunate incident, the car has been fitted with dual front, front side and full-length side curtain airbags in addition to traction and stability control systems and a tyre-pressure monitoring system. Allow driving to become your next best hobby with the impressive interior the model has been built to accommodate. The leather upholstery, genuine wood trim, a touchscreenactivated navigation system within the 2016 Land Rover Range Rover ensures you are comfortable and confident as you navigate through the city streets.. Complimentary features that assert the fact that this indeed the automobile of the century include the heated front seats, a heated steering wheel, a power lift gate, a rear parking camera, tri-zone automatic climate control, Bluetooth phone connectivity with audio streaming and 19-inch alloy wheels. In the case of the 2016 Land Rover Range Rover, class is earned. http://www.landrover.com/vehicles/ range-rover/specifications.html

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Golf made easy

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olf is not only a lifestyle, it’s also a good way of unwinding after a intense week in the office or managing your business. It is the perfect way to relax over the weekend, do some exercise, catch up with friends, and perhaps conclude that deal. Today, the profile of the Kenyan golfer has changed to that of young to middle aged person contrary to earlier times when it was associated with geriatrics who had made their money during the colonial times. It is a game of discipline and integrity; you are your own referee. You report your mistakes, and penalize yourself while at it! For those who have not started playing (as yet), golf looks like a lazy man’s (or woman’s) game. It isn’t. To begin with, for an eighteen hole, you will take a brisk walk of not less than seven kilometers, and for longer courses (like Thika Greens), more than ten kilometers. Usually, a round of golf lasts about four hours, again depending on many variables, such as weather, the number of people playing and the speed of play by all the teams in the field; as they say, a herd of buffalos (or any other animal for that matter) moved as fast as the slowest member of the herd. For the uninitiated, here are some of the words that you will hear golfers mention casually, but which might sound like some Greek.

Medal: It’s got nothing to do with winning a medal. It is a format of play where all shots are counted, as opposed to stableford, another format of play that is popular with amateurs. Par: Every hole (and there are eighteen of them) is ranked in terms of length. Par 3, 4 or 5. If you get a par on a par three, you have finished playing with three strokes. Birdie: You have played better than the hole ranking. i.e par three, you have holed out in two. Eagle: You have played two better than the hole ranking i.e par four, you have holed out in two. Albatross: Well, they are very rare. On a par five, you get your ball in the hole in two shots. Hole in one: As rare as an albatross. Means that you hit your tee shot, and it flies straight into the hole. Bunker: Nothing to do with Saddam Hussein. It is where you find some sand, just to make your life slightly more exciting (or difficult, depending on how you have been playing generally) Tee Box: It is where you plant that little plastic or wooden tee and start off your journey. Fairway: It is where the ball should (ideally) land after teeing off. Greens: That’s where you use your putter, that little club that taps the ball ever so slowly into the hole. Nicely mowed and smooth, and with some exotic grass, some caddies have been known to remove their shoes when walking on the green.

Keeping ‘Flash’ Tundo on the move

Front suspension

The proto car boasts of a Ford body and Mitsubishi Evolution 10 engine that makes it a beast to reckon with the KCB Bank rallies. This new entrant to the rally scene costs between Sh. 15-24M in assembly costs depending on the level of customization, undeniably making it a car of choice for the rallying gurus. Costs of running the car during outings are extremely high with the machines using at least 200 litres of aviation Gas fuel and 10 tyres during each outings. Peek just some of the specs and resources below that go into making one of the first choice vehicle in the world of motor sport.

Rear suspension

Estimate Tyres- 22,000 Kshs each x 14 tyres - Sh. 308,000 Aviation gas fuel 200 litres @ 200 - Sh. 40, 000 Brake discs – Sh. 193,200 Roll cage – Sh. 213,600 Carbon seats Evo- Sh. 288,000 Drivers and Co drivers foot well – Sh. 96,000 Door Cards – Sh. 201, 160 Intercom – Sh. 83,000 Trip Meter- Sh. 43, 900

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PURSUITS

GETAWAY

Stay. Dine. Meet. Join.

The Shaza Club

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here is a new club in town. The members of this club pride themselves on the fact that they have earned the privilege of a true and authentic African experience. Membership in this exclusive club gives you the opportunity to escape at any time and revel in treats the club has to offer. The Shaza Club is where you want to belong. It has one of the highest ratings on Booking.com based on client feedback.

The Shaza, recognized and published by the Rolls-Royce Enthusiasts’ Club (RREC) in their Strive for Perfection: A Celebration of Design & Luxury, the club awards you with the ultimate coast address. The strong Swahili and Moroccan architecture is prevalent within the expanse of the breathtaking lobby and the spectacular design resonates throughout the club. Members have their pick between the lavishly furnished penthouse suites, the studio suites or the

“A house is made of walls and beams; a home is built with love and dreams.” William Arthur Ward

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exclusive suites. Fine dining at Saffron, ice cream and milkshakes with your family at the BLu ice cream bar and sundowners at the pool bar overlooking the awe-inspiring panoramic view of the Indian Ocean are many of the activities available to Shaza club members.You have a choice of a Penthouse, two and three bed apartments. You deserve it; Give it a go. The Shaza Club is located on Shanzu Beach road in Mombasa, Kenya. www.theshaza.com

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