Category Archives: Delamere

Unga AGM 2008

The company which was founded in December 1908 by Lord Delamere to mill his wheat harvest, is now a century old. It is celebrating its fourth straight years of profits on the back of improved sales Kshs. 9.5 billion (~$125 million) and profits of Kshs. 564 million (~$7.5 million). The Chairman commented on the improvement from the time a few years back when they used to record losses and had their financial accounts qualified by the auditors.

slow registration

Excerpts: missed a few minutes of the meeting as the registration was really slow – just two ladies, with no computer. They had to write every shareholder name down, and have them sign, but without verification of their legitimacy

Bonus: The company offering a (1) bonus share for each five (5) held to reward shareholders since the board had opted not to pay a cash dividend this year.

Company structure: The Seaboard Corporation is a management company and shareholder that contributed to the turnaround. However their presence is a sore point with some shareholders unhappy that while they have no divined, Seaboard gets paid a minimum of Kshs. 12 million a year that will escalate as the company gets more profitable. Their agreement has also been extended by the directors for another five years and there was also a question on the loans owed to the company that could be called in at any time – an unlikely scenario according to the board
– Shareholders also asked on the relationship between Nampak (a partner company) and Bulpack which was a joint venture between Nampak and Unga to make bags. The dividend paid that appears in the accounts was paid to Unga from Bulpak, and not by Unga.

(No) Dividend: Though this was the fourth year of profits, the board said it still needed to retain cash for plant & machinery replacement and to also strengthen the balance sheet.

No Maize in Kenya: Later the Unga MD Nicholas Hutchinson gave a talk on the current maize shortage and stated that the company (Unga) had ran out of maize (corn) stock floor eight days ago. He said there is not enough maize in the country, and the late decision by the Government to import maize, means it will trickle to the markets slowly – by mid December. The Cabinet may release more to millers, but the Government also wants to build up grain reserves and assist displaced people (flood, post-election violence victims)

The maize harvest this year was bad – Unga is offering Kshs. 2,500 per and 2,250 in Nairobi and Eldoret respectively but are still not able to get enough maize so they are operating about 35 – 40% which may show in the coming results

For consumers faced with a high retail price (just under Kshs. 100 for a 2kg pack, it’s a good time for farmers, but bad for consumers (dangerous?) – as prices may not drop significantly even after the supply. He said that the Government will be importing maize to Nairobi at Kshs. 2,500 if no duty is paid and that it must speculative ventures – which has affected supply of maize. Also, next year’s maize harvest could be just as bad.

Receivables: are much higher than the year before. Management responded that its from their increased business. They had in fact reduced the number of customers i.e. 55 key wholesalers that they deal (down from 140) with and gave them incentives to pay cash or open bank guarantees.

Outlook: – Asked about market share, management said it was growing. They focus on urban markets and supermarkets, and don’t emphasize rural sales as entrepreneurs can flour mill and sell it cheaper than Unga branded products.
– Other subsidiaries: are performing well like the Uganda one and animal feed division – Unga had anticipated a maize shortage so had started to substitute maize with wheat in their animal feed. Wheat subsidiary is good though the current good prices may fall next year

Shareholder gift

Goodies: Each shareholder present got a voucher for a bale of baking flour. Which retails at about Kshs. 1,500 ($20)

PR/media campaigns

De La Rue
Thomas De La Rue, who print the currency for Kenya and many other countries have launched a PR. campaign at a time when their contract to print Kenya’s currency is up for review. De La Rue point out that they have invested in a 3 billion shilling factory in Nairobi where they print many world currencies, employ 300 trained Kenyans and contribute 600 million shillings annually to the Kenyan economy.

De La Rue have printed Kenya’s currency since independence, but have faced stiff competition from new companies and politicians, including one arm of Anglo-Leasing.

Italians at the Coast
Italian Residents of Malindi and Coast Province have also launched a PR campaign to refute allegations that they engage in drug trafficking and prostitution activities. They point out that they are responsible for 85% of the tourism business in Malindi, and are behind numerous community & charitable activities. Also that, out of the 1,000 Italians on the island, only 5 have been investigated for criminal activities over the last 27 years

Boycott Delamere
There’s a chain mail going round urging Kenyans to boycott Delamere products following the controversial dismissal of murder charges against Delamere’s grandson who had shot and killed a Wildlife ranger.

Mo Money
Foreign Affairs Minister, Chirau Ali Mwakwere wants the High Court to increase the 3 million shillings awarded to him following a successful defamation suit against Royal Media Services.

Kenyan version of the OJ trial

Tom Gilbert Delamere grandson of Lord Delamere will be charged with murdering a wildlife ranger who was conducting an investigation on the illegal sale of bushmeat by Delamere’s farm.

It will be interesting to see how the case will play out. Kenyan prosecutors have proved to be so inept in high-profile cases and are frequently let down by poor police investigations. It’s like Christoper Darden vs. Johnnie Cochran as high-priced and polished defence lawyers make mince meat of state prosecutors. In the past, (White) Kenyan Minister Bruce Mackenzie killed a Kenyan at the Coast and was acquited I believe on manslaughter charges, while some American sailors were were released after been found guilty of murdering a prostitute in the early 80’s in Mombasa.

Now we’ll see if it is possible to convict a white Kenyan for murdering a black government official in the line of duty.