Category Archives: Rea Vipingo

Vipingo Ridge

April 2010 saw the formal launch in Nairobi of the Vipingo Ridge a golf resort development at Vipingo north of Mombasa. It is similar to Great Rift Lodge, and is situated on 2,500 acres carved off a sisal estate Rea Vipingo and comprises two world-class golf courses and the real estate villas, some still available to buy.

The development Chairman spoke (on behalf of other directors unable to attend because of the Iceland Ireland Volcano & flight shutdown) about plans to build two world-class golf courses here – one of which (Baobab) has been open since last year and played by many, the other will be ready in June. They were built through trying times including the 2007 election violence and the 2008-9 global credit crisis, but he says they never compromised in quality. The courses were designed by 1988 Kenya Open Champion David Jones.

On the first course, they had 250 parcels of land of which 190 have been sold, but now 60 remain and invited attendees to take them up. The remaining one ace plots range from 10 million (now ~$130k) to 20 million (now ~$260,000) depending on their location and the course views, and some two-acre ones are 21 million.

Villas range from 2-bedrooms (150m2) of about 20 million (now ~$260,000), 3 bedroom (200m2) of about 25 million (now ~$325k) and 4-bedrooms (250m2) of about 28 million (~$363k), can be fully-furnished for rental purposes, and all are positioned on terraces to give views of the golf course and the (distant) sea. They are low density of about 4 villas on one acre built in Swahili/Arabic design, and membership to the golf club and a private beach club is included.

Najib Balala the Kenya Minister for Tourism gave a speech outlining the government plans for expanding the tourism sector and where golf tourism fits in their Vision 2030, which has three resorts cities planned – Vipingo, Diani and Isiolo. He also mentioned his push within government to have a dual carriageway road built from Mombasa to Malindi to take precedence over the upgrading of Malindi to an international airport while Mombasa airport remains under-utilized and this has been agreed to in principle. He said Vipingo will host the second Utalii College (which trains staff to work in the tourism /hospitality sector) and will also be inviting a developer to set up a hotel there to complement the college and the Vipingo resort area.

A round of golf (18 holes) at Vipingo costs $40 (~ksh3,000) plus caddy fees of $6 (~Ksh500)

Rea Vipingo 2009 AGM

Nairobi Stock Exchange listed Rea Vipingo Plantations Limited and one of leading producers of sisal held’s its’ 2009 annual general meeting on March 27 2009 at the Panafric Hotel Nairobi

Meeting started at 11 a.m. sharp with a short video shown about the company explaining more about its background and what it does – Created by an amalgamation of companies in 2003 that acquired more estates in Tanzania in 1995, got listed on the NSE in 1996. Since it was listed sales have grown from Kshs 537 million to Kshs 1.2 billion and production is now at 17,000 tons per annum

The meeting led by company chairman Oliver Fowler went straight into shareholder questions immediately after the video

Professional shareholder alois chami stood to ask a question (he’s at every AGM and always asks a couple of inane questions – virtually all company chairmen & secretaries know him by name) – but his mobile phone went off and he had to sit and answer it about a half dozen phones go off at every meeting, and some shareholders magnify this discourtesy by answering the calls

how the company’s’ performance was in 2009? Chairman said it was quit good, maintained their markets, still getting good buys from China, while the weak shilling/strong $ has also helped them

impact of the global economic crisis? performance still good as company has good cash position, scaled back capital expenditure and made some cutbacks. Still they can’t predict how the sisal industry will perform and are also nervous

competition from petrol twine versus their sisal twine (the price of oil is 1/3 of what it was a year ago). Chairman said their primary competition, was not from synthetic twine, but from other sisal produces – as they were all competing for a diminishing pool of customers

if company doing well, why reduce dividend? (from Kshs 0.8 per share in 2007 to 0.2 in 2008) Chairman said at the time of the decision, they actually intended to pay no dividend since the outlook was so grim (and wanted to conserve cash), but since they got some contracts, decided to make a modest payment

does low share cap hinder borrowing?no it does not, their borrowing is quite low considering the value of the company’s assets and which bankers look at more. Their facilities are up fro renewal next month, but don’t expect any hitches

how much are contingent liabilities? (no figure was indicated) chairman said they would be mostly for industrial claims covered by workmen compensation and there were no material claims of substance

no logo/signature by directors & auditors in the published accounts Chairman assured shareholders that they had been signed and the auditors had signed and the accounts could be verified a their office or the company registry (Chami got his act together and asked this, he was later brushed aside by another shareholder when he kept hammering this trivial point)

subsidiaries part of profit came from fair value gain (a book profit, not actual profit) as well as from revaluation of biological assets

does having a golf course add value to the company? Chairman took a moment do correct a misunderstanding that is occasionally repeated in media and the company Rea Vipingo is not the developing real estate or golf courses in Vipingo, Kwale (Coast Province) it is being done by another company adjacent to the sisal estate (and while they were all part of the original sisal estate – the land that was not suited for sisal production (sandy beach) is being used by the other company)

what does company do for CSR? Company engages in corporate social responsibility – staff are housed at sisal estates in Kenya and Tanzania and receive medical care while children are schooled in nursery and primary school on estate, with some getting scholarships to high school . they have in the past been involved in famine relief and distribution in Makueni district, but in 2009 the government has not requested their assistance

dry season affect sisal? sisal is drought resistant, but prolonged dry season can affect production

bank borrowing chairman was asked, but explained they had take some foreign loans, and one from a supplier (Wigglesworth) since they were a lower rates than bank loans

director elections after 12 years of service director Musa Sang retired from the company board during the year and he was replaced by Brown Ondego (chairman of rift valley railways, and former MD of Kenya ports authority). shareholders confirmed his election, but also (again) asked to consider getting (i) female directors and (ii) younger directors (these will being new skill like ICT to c company which did not have a website till a few years ago)

hot button moment director allowances in asking the shareholders to approve non-executive directors remuneration for 2009, the chairman mention that they will rise by 10% – from Kshs 30,000 per month to Kshs 33,000 per month (~$400). Some shareholder briefly protested that their dividend was being cut while directors get paid more, and that the directors’ increase should also wait till the economy and company’s performance improved. The board poorly defended this matter, but it was passed without much interruption

special business shareholders approved the board decision to purchase an additional 330 hectares for sisal production from vipingo estates limited (VEL)

goodies one shareholder stood and complained that the company had NEVER given shareholders a token item of appreciation, unlike other companies, and the chairman said they would once, performance improves. Tea and snacks were served outside by the pool, but it was a mad scramble that left many unhappy as the bitings were finished by the early grabber

networking had a nice chat with Coldtusker and Ryan Shen Hoover while this was going on

Un-Absa

A South African banking regulator believes that absorbing Barclays Africa operations in nine countries (including Barclays Kenya) would be “too much to chew” for Absa. This is part of the second phase of the Barclays Absa merger.

Also at the NSE

Consolidation at REA Vipingo
The Robinow family (UK) has applied to the Capital Markets Authority (CMA) to increase its stake in Rea Vipingo plantations from 21% to 57% by acquiring shares from REA Holdings (for Kshs. 94 million) and Unitbuckle Holding through a private transfer. They are appealing that the effective takeover be classified as a consolidation and not as a takeover and intend for the company to continue trading at the NSE.

East African Cables group turnover increased from 825m to 1,162 million shillings and profit almost doubled from 124m in 2004 to 213m in 2005. The company will pay a 2nd and final dividend of 3.5 sh per share (1st interim dividend was 1.5) after the AGM in March.

Pan Africa Insurance ended 2005 with net premium income increasing from 790m to 1,031 million and total income from 1,105m to 1,569m. Profit for the year increased from 94m to 177m and the company will pay a dividend of 1.2 sh per share (up from 1) after May 11.

Serena: Wednesday, February 15, is the deadline for Serena shareholders to participate in the company’s consolidation.

Banks

EABS Bank intends to reduce its share capital from 1,662.5 million to 1,112.5 m shillings and a court hearing will be held on February 28 in this regard.

Dubai Bank has advertised to sell the road construction assets of the late Sunil Behal – including graders, caterpillars, lorries, tippers, fuel & water tankers, trailers and bulldozers – by public auction on February 21.

Scholarship opportunity

The Les Aspin Center for Government is inviting a select few Kenyan to a 6-week training program on anti-corruption and good governance to be conducted in Washington DC in August and September 2006.

Candidates: Must be Kenya so over 25 years (if university students over 21 years) with not less than 2 years relevant work experience e.g. at government agencies, civil society, human rights, women development, education, print & electronic media, or to do with public or private accountability.

Applications: Deadline is March 17, and send pack (application letter, 2 letters of recommendations, p.copy of passport, current org. info, CV and 200 – 250 word statement of purpose on how training will benefit the candidate & society) to the Les Aspin Center for Government P O Box 50309 city square Nairobi. (apply only to Nairobi & by snail mail)

Cheap Advertising
The Nairobi City Council has slashed advertising rates by 50%.

New Developments

Construction
– Komarock Estate expansion continues with the construction of Phase V comprising 521 middle-income houses.
– Rea Vipingo will build a golf course/resort on a former sisal farm at Vipingo, Kilifi.
– The Lutheran Catholic Church will construct a new headquaerets/5 story office park on Uhuru Park next to the traffic centre.
– Interconsumer Products limited will build a cosmetics factory in Embakasi.

Banking: Former Finance Permanent Secretary, Martin Oduor Otieno, is the new deputy managing director of Kenya Commercial Bank.

Church: A Presbyterian Church in North Carolina, has so many Kenyan worshippers, that they now have a Swahili service

Mining:According to the Kenya Gazette new companies have been issued with new licenses to prospect for metals and non precious minerals in busia/siaya, migori, makueni and kwale

re-union Alumni, teachers and families of Strathmore College, Strathmore University and Kianda are invited to an alumni weekend in October: on Friday 7/10 at the Hilton, and on Saturday 8/10 at the Madaraka Campus.