Category Archives: Nakumatt

Plastic Bag Ban in Kenya 2017

A visit to Nakumatt yesterday showed how the supermarket is trying to lead the proposed Kenya plastic bag ban by not packing any more shopping in plastic/polythene bags.

Neighboring Rwanda has had a plastic bag ban for a few years, and is now famed for its enforcement of the ban which has contributed to greener and cleaner image of the country. But the plastic ban was a shock, and the Government needs to champion consumer awareness before enforcement, and target food manufacturers, kiosks, fast food vendors, and the informal sector, which are all heavily dependent on the thin plastic packaging. While some have  commented that cash-strapped Nakumatt is cutting back on overheads such as free bags to shoppers, at the checkout line, Nakumatt offers customers #ThinkGreenGoBlue eco-bags which retail for 75/= large and 50/= small.

In a recent interview, Environment Secretary Judi Wakhungu who gazetted a ban on use of plastic bags, which is set to come into effect in September. She said it will be done in phases, as she spoke about the urgent need to clamp down on plastics, which has the support of most Kenyans and countered claims of job losses as a result of the ban

All you have to do is just go outside Nairobi. And how will you know you are approaching a town or a city? You will see plastic bags everywhere.

EDIT On the plastic deadline date (Aug 28) Nakumatt now packs shopping in some hybrid thing white bags that it sells for Kshs 5/=  each. 

Nakumatt Deal Time

Last week there was a surprising newspaper story that businessman and former MP Harun Mwau had sold his (7.7%) shares in Nakumatt supermarkets.

Businessman John Harun Mwau has sold his 7.7 per cent minority stake in Nakumatt Supermarkets ahead of the retail chain’s plan to take on board a new shareholder with deep pockets to pull it out of a bourgeoning debt crisis.

Late last year, when Nakumatt acquired three stores in Western Kenya they had released a statement which noted that:

Currently enjoying a less than 25% market share of the formal retail space, Nakumatt Holdings, is actively seeking to retain a bigger slice of the mid to premium segment. Through the strategy, the retailer has been working, to grow its gross revenue to over US$1billion in the medium term period while growing its network footprint across East Africa.

Nakumatt has been in the news for the last 6 or 7 years. It was embroiled in the closure of Charterhouse Bank in which it owned 10% and was widely accused of using the bank to launder money and evade taxes. Nakumatt then went ahead and published a lengthy declaration of defense explaining its’ relations with Charterhouse, tax payments (in relation to income), revenue, stores, and compliance with Kenyan law etc.

The new Nakumatt deal comes at a time of unprecedented activity in the retail sector activity both in mall development and supermarket chains.  It also coincides with reports of cash flow issues at Nakumatt, seen in slow payments to suppliers, as have had other supermarket chains, including Uchumi earlier this year.

It is expected that exit of Mwau will lead to another deal at Nakumatt that will bring on board new shareholders, both local or foreign.

Nairobi Mall and Supermarket Moment

A research report by Knight Frank notes that Nairobi has about 470,000 square meters of shopping center space under  development underway and is one of the five largest cities in Africa (excluding south africa) in that regard (it currently has 391,000 square meters of shop space).

Knight Frank Shop Africa Nairobi spotlight

Knight Frank Shop Africa Nairobi spotlight

Knight Frank notes that, aside from Actis (the pioneering UK investor), most of the developers and landlords of Nairobi’s shopping centres are local Kenyan property owners.

A second Buffalo Mall is  to be built in Eldoret. This comes after the Pivotal Fund acquired 50% of Buffalo Mall Naivasha.

Carrefour: This week opened their first store in East Africa. a 60,000 square foot hypermarket at the Hub in Karen, one of 57 stores that have opened there. Carrefour will be the anchor tenant and are run under franchise of Majid Al Futtaim Retail of Dubai.   EdIt – Carrefour Kenya have an app for shoppers 

(The) Game operated by Massamart. in which Walmart has a majority stake, opened at Garden City Mall as the anchor tenant. 

Khetia:  are in the midst of a Kshs 1  billion expansion in western Kenya. They plan to open up stores in Kisii, Busia and Kericho, each of which requires Kshs  200 million.

Nakumatt: Just launched their 59th branch in Kakamega – the Nakumatt Midtown Supermarket. It was remodeled after nakumatt acquired three supermarket stores in Western Kenay (Kakamega, Bungoma, Busia) from Yako Supermarkets in a Kshs 260 million investment program. They have also added new stores like  Sports Planet departmental  at the reopened Westgate mall. 

Naivas The ownership of widely admired chain is subject to an inheritance court case. 

Sarit Center: Nairobi’s first formal mall is undergoing an expansion program to add more stores.  

Society Stores: An offshoot of a Khetia family member  – Trushar Khetia, hopes to grow the store brand. He says that they had the first chance to buy out Ukwala, but it wasn’t backed by the board and the deal fell through.

Two Rivers backed by Centum and built by Avic will also house a Carrefour store at the 62,000 square meter site in Ruaka that sits on 100 acres.

Tuskys: is focusing this year on staff welfare and streamlining customer service delivery through deployment of  digital platforms for e-commerce. Shareholders are also trying to settle issues in readiness for a listing at the NSE by 2018.

Uchumi:  Is under new management and, once again, in search of a restructuring deal that involves working with suppliers, sale of assets (such as Ngong Road and Langata branches) and a share sale to a new anchor investor for about Kshs 5 billion. This has been complicated by some suppliers who sued to wind up the company, but talks are ongoing with the government, and it  appears that majority of the  suppliers will agree to convert Kshs 1.8 billion of the dent owed to them into equity at Uchumi.

Ukwala was bought by Choppies of South Africa. The deal was completed after an tax agreement deal  was reached with the Kenya Revenue Authority who were demanding back taxes from Ukwala.  Ukwala had admitted to owing the taxman Kshs 101 million, but appealed the additional Kshs 845 million that KRA was demanding. 

Finally, suppliers,  have complained about delayed payments by supermarkets retail chains. This was highlighted in letter from the Kenya Association of Manufacturers (KAM) to Tuskys, Nakumatt and Naivas.

$1 = Kshs 100

NSE Moment: Buyouts, Vultures, Divestments

A look at recent deals at the Nairobi Securities Exchange (NSE) and other privatization and equity bids since the last update. 
Divestments
 
Essar released a bombshell from India that they would be abandoning their investment in the old Kenya Pipeline Refineries and sell their stake back to the Kenya Government for $5 million.
At the same time a Receiver Manager put up (the closed) Pan African Paper Mills up for sale, but that is likely to be complicated by links the company had with vulture funds who purchased Panpaper’s debts in the international secondary debt market. These faceless entities — basically different mutations of one group (going by the names like Noon Day Asset Management Asia and Farallon Capital Institutional Partners) — and 11 such firms own 37% of the company’s debt.
The Essar fallout prompted Parliament to also look into the mystery of Orange Kenya which keeps asking for more government support even as the government loses equity in the company.
Since then, the government announced that a new office will advise the government on state investments: Attorney-General Githu Muigai said the Government Transaction Advisory Services Office will guide state deals with the aim of sealing opportunities where the latter has been losing its shareholding in parastatals without monetary gain.
  
EDIT: Another divestment is Kenya Wine Agencies Limited (KWAL) finally exiting Uchumi after disposing of all its shares. It had 18% in 2004 and 4% in 2012. – via @NSEKenya 

Done Deals

Recent M&A deals approved by the Kenya Competition Authority include:

Agri-Business: The acquisition of Juhudi Kilimo (turnover of Kshs 30 million) by Soros Economic Development Fund.

Aviation: The acquisition of Lady Lori Kenya by Ian Mbuthia Mimano, Adi Vinner and Peter Nthiga Njagi.

Education: The  purchase of 60% of Safer World Investments by School Operators Limited (owners of Peponi School) (The two will have a combined turnover of Kshs 672 million or ~$8 million)

Finance & Banking: The acquisition of Francis Thuo & Partners by Equity Investment Bank.
Food: The acquisition of 66% of Coca-Cola Juices Kenya by the Coca-Cola Export Corporation.
The acquisition of Lonrho PLC by FS Africa  (as part of a $280 million deal in South Africa).
The acquisition of Ma Cuisine by Harper Holdings.
Health: The acquisition of Jampharm Chemist by Viva Afya (the two have a combined turnover of Kshs. 19.5 million).
  
The acquisition of Ascribe Group (which has a turnover of Kshs 70 million) by Emis Group.
Deals Bubbling

Brookside Dairies have taken over Buzeki, the makers of Molo Milk, in a Kshs 1.1 billion ($13 million) deal that increases Brookside’s share of the dairy market to 44%. 

EDIT GAZETTE NOTICE No.  15068 – THE TRANSFER OF BUSINESSES ACT


NOTICE is given that the furniture, fittings, fixtures and the assets and the stock being the business of manufacturing and selling of milk and milk products owned by Buzeki Dairy Limited (the “Transferor”) on the premises situated at Ganjoni, Mombasa have been sold and transferred by the Transferor to Brookside Dairy Limited who will carry on the said business of manufacturing and selling of manufacture of milk and milk products at the premises of Brookside Dairy Limited under the name and style of Brookside Dairy Limited (the “Transferee”) with effect from 1st November, 2013 (the “Completion Date”).


The address of the Transferor is Post Office Box Number P. O. Box 85532-80100, Mombasa, Kenya.
The address of the Transferee is Post Office Box Number P.O. Box 236–00232 Ruiru, Kenya.

The Transferee is not assuming nor does it intend to assume any creditors or debtors of the Transferor incurred in connection with the purchase and business of the assets of the Transferor up to and including the Completion Date and the same shall be paid and discharged by the Transferor and likewise all debts and liabilities owing and due to the Transferor up to and including the Completion Date shall be received by the Transferor.

Dated the 5th November, 2013.

KIPKENDA & COMPANY ADVOCATES,

Advocates for the Transferor.

COULSON HARNEY ADVOCATES

Centum shareholders approved new investments in Liberty Beverages, Mvuke Power, Two Rivers Lifestyle Centre, Centum Share Services, Centum Asset Managers (who are buying Genesis Kenya)  and the acquisition of 79% of Kilele Holdings.

Africa Media Venture (AMVF) a Dutch-based venture capital firm has raised its stake in a Kenyan restaurant guide website, EatOut, from 25% to 32% for Kshs 17 million ($200,000) in a transaction that values the online portal at Kshs. 220 million.  
Lonrho is selling its entire stake (11%) in African airline Fastjet. 
 
Crystal Ventures (owned by the Rwanda Patriotic Front) plan to sell their 20% stake in MTN Rwanda, in an IPO which will make MTN Rwanda the third company listed on the Rwanda Stock Exchange – after Bralirwa and Bank of Kigali.
Sameer Investments is buying out 41 million shares that Bridgestone owns in Sameer Africa – after which Sameer will own 159 million shares equivalent to 72% of the company.
Across the border, Tanzania’s Precision Air is looking for a government investment, just a year after an IPO which raised $7 million and reduced the shareholding of Kenya Airways from 49% to 35%
 
Unga Group will acquire Ennsvalley Bakery for Kshs 125M ($1.5 million) and also dispose of its shares in Bullpak.

EDIT: Kestrel Capital has arranged a $1.2 million private placement of convertible debentures in Stockport Exploration to local Kenyan qualified investors. Stockport is listed on the Toronto Stock Exchange and has mining interests in Nyanza Kenya where they are exploring along a prolific gold-hosting greenstone belt. Zeph Mbugua, the Chairman of TransCentury, became a director of Stockport in February this year. 

EDIT:  Swedfund, the Swedish state’s venture capital company, and The Africa Health fund through The Abraaj Group, a leading investor operating in global growth markets, made a $6.5 million investment in The Nairobi Women’s Hospital, a leading private healthcare provider for women and their families (men and children) in East Africa.
Shareholder Restructurings
 
Businessman Christopher Kirubi is acquiring an additional 32 million shares in Centum Investments (for ~$8.6 million) which will raise the stake he controls to about 30% and he has received an exemption from complying with the NSE requirement to make a takeover offer.
 
After listing at the NSE, I&M shareholders have done a swop to bring the company’s investor numbers past the 1,000 shareholder mark.
  
The WPP Group (through Cavendish) is increasing its shareholding in Scangroup from 33% to 50%.  WPP, the largest advertising group in the world, is strengthening its control of Kenya and the East African market ahead of the merger of the two other advertising firms – Omnicom the No 2. in the world  (owners of TBWA) and No. 3 – Publicis (of France)  – which, when combined, will be larger than WPP.
De-Listing’s – Companies leaving the NSE 
Access Kenya Group after their buyout by Dimension Data was approved by the Government
 
CMC is at the conclusion of a buyout offer from Dubai’s Al-Futtaim Group who are offering existing shareholders Kshs 13 a share, or about $90m. 
 
The Dubai-based conglomerate, which holds lucrative distribution rights for Toyota and Honda in its home market, will help the struggling Nairobi-based automotive group expand its brands beyond its existing stable, which includes Volkswagen, Ford, Mazda and Suzuki.
 
R.E.A. Trading, which owns 56% of Rea Vipingo Plantations has offered to buy out all other shareholders at a price of Kshs 40 per share, representing a 43% premium. The shares that have since been suspended from trading and will be delisted from the NSE if the deal succeeds.
Stalled Deals
There was a Financial Times (FT)  article on queues forming to buy up East African retailers but deal opportunities at Nakumatt and Naivas have been hampered by shareholder/family disputes that darken their buyout reputations and possibilities.

Mostly Equity

Friday the 13th, and almost a year after Equity Bank listed on the NSE should have capped off a great week for Equity Bank – except for some MP’s in Parliament and anonymous letter circulating on the web. More on possible impact on share price and a great defense of the Equity’s significance to the country’s business and investment scene – but BDAfrica should probably mention that their CEO is an Equity director, in the same way CNN anchors mention their connection to Time Warner each time they report on the company.

more
– Equity is usually the first bank to announce quarterly results and we can expect more great numbers in the weeks ahead for June 2007.
– Alongside shareholder Britak, Equity will take up a 24.9% stake in Housing Finance. But the banking Act discourages banks owning shares in other banks (merging is ok, shareholding is not)
Going international, Equity is poised to expand again, opening branches in Rwanda and Uganda
– Equity bank customers will also be able to access their funds at Nakumatt stores starting next week

More bank happenings

ABC joins the flat fee account race with a Kisima account (priced at 495 shillings)

Barclays has partnered with Nakumatt stores to launch a credit card. Barclays also has a branch on River Road I hear – a sight to see!

What can the Central Bank do about the strengthening shilling? With appreciating currencies, see what India did to help their exporters and Uganda did to curb currency speculators.

Consolidated bank has introduced solid loop product for businesses pursuing contracts/tenders/LPO’s

EADB has a line of credit from EXIM India to finance importation of eligible goods from India into Kenya, Uganda or Tanzania

Family finance aka Equity Blue opens a branch in Kapsabet

CDC opts out of the Housing Finance rights issueleaving the door open for Equity Bank and Britak

KCB now opens branches every Saturday from 9 to 12. The days of banks only opening on the first & last Saturday of the month is now history, with most now open every Saturday with longer hours, even on Sundays.

As the Telkom privatization kicks off, will several banks opt to get paid or sit back and convert their debt into Safaricom shares?

other economic developments
Tata chemical (majority own of Magadi soda) plans to build another soda ash factory at Lake Natron, Tanzania- a move being opposed by conservation groups
– A new School of the Nations in Kitisuru
– Lake Naivasha resort and spa
– The government plans to set up a radioactive waste processing facility on Karen!
– The National social security fund plans to complete an 11 storey parking complex on Ngong road. It’s about time someone did something to ease the parking shortage esp. for upper hill workers

opportunities

Jobs – most from the daily papers this week

Chief financial officer at the Africa trade insurance agency . D/L is 22/7

Kenya capital markets authority: mangers [finance, corporate communication], assistant managers [financial analysis, enforcement,] officers [compliance (2), legal, surveillance, research] accountant, MIS systems analyst. Details at online and D/L is 25/7

Action research officer at decentralized financial services recruitment@kenyagatsby.org by

Join the East African development bank Young processionals program. Apply to
recruitment@eadb.org by 23/7

Business relationship manager at Equity bank. Apply to jobs@equitybank.co.ke by 20/7

First community bank: Financial controller, Managers (trade finance, internal audit, human resources, brand development, e-banking & cards, legal) Branch managers (Nairobi, Mombasa) Relationship managers (corporate banking), corporate credit analysts, retail credit analysts. Apply to fcb-vacancies@ahmedabdi.com by 25/7

HLB Ashvir: partners or senior managers. Apply to akassam@ashvir.com

Assistance credit manager at housing finance. Apply to human.recources@housing.co.ke by 20/7

Kencall: trainee managers, head of HR, transcribers (50) and other positions. Apply online.

Apply online for project planner at Kenya airways

Kenya ICT board: Marketing manager, financial management specialist, procurement specialists. Apply through Deloitte at esd@deloitte.co.ke by 27/7

Apply online for Financial analysts Kenya shares

Programme Manager for the Global Water Operators Partnership Alliance of UN-HABITAT . D/L is 4/8

General Manager at UUNET. Apply to jobs@biz-ideas.bix by 20/7

Independent financial adviser at Winton investments. Apply to jobs@winton-investment.com

CEO of the Youth enterprise development fund. Apply through Manpower associates by 25/7

aviation
CMC aviation requires captains and first officers for dash 5 and dash 8
Jetlink looking for captains and first officer for dc-9 aircraft