US firm cements African business with Ksh7Bn factory in Kenya

The factory can produce about 7.8 billion pellets of chewing gum annually

US headquartered Mars Wrigley Confectionery has cemented its business in the East and Central Africa region with the new state of the art Ksh7billion (USD68.9 million) manufacturing plant in Athi River, Machakos County, Kenya.

The plant was officially commissioned by President Uhuru Kenyatta on Tuesday. The President was represented by Industry, Trade and Cooperatives Cabinet Secretary Peter Munya.

Kenyatta has since hailed Mars Wrigley for putting up the new factory citing the need to invest in additional manufacturing capacity to create more jobs for Kenyans.

The investment gels well with his ambitious Big Four Agenda’s manufacturing pillar that seeks to increase manufacturing’s contribution to GDP from the current 8.5 per cent to 15 per cent by 2022.

“To create the desired jobs, we need to invest in existing and new industries that will grow our country’s manufacturing capacity from the current eight-point four percent to fifteen per cent of the Gross Domestic Product by 2022,” President Kenyatta said in a speech read on his behalf by CS Munya.

He added that the government was particularly keen on working with the private sector to achieve that goal.

“My administration remains committed to catalyzing even more private-sector-led growth in the manufacturing sector,” the President said.

The new factory which is constructed on a 20-acre piece of land in Mavoko, Machakos County has replaced the company’s old plant that was located in Nairobi’s Industrial Area.

According to the company’s management, investment in a new facility whose construction started three years ago, was driven by the need to meet growing demand for the firm’s products in Africa, while improving capacity and technology.

READ:Americans to build $70M chewing factory in Kenya

“With the rapidly expanding middle class and youthful population, we see our products becoming more and more integrated into people’s lifestyles.” Said Mr. Duncan McCulloch, Regional Managing Director for Mars Wrigley Confectionery.

The facility is expected to have a major impact on the Kenyan economy in terms of job creation both directly at the factory and indirectly through its expansive value chain a

US manufacturer Mars Wrigley Confectionery has cemented its business in the East and Central Africa region with the new state of the art Ksh7billion (USD68.9 million) manufacturing plant in Athi River, Machakos County, Kenya. It will serve a growing market of more than 14 countries - that includes Uganda, Tanzania, Rwanda, Burundi, Ethiopia, Djibouti, DRC and South Sudan. The new factory will produce popular Mars Wrigley Confectionery brands, including Big G, PK, Doublemint and Juicy Fruit.
The main block at Mars Wrigley Confectionery’s new factory in Kenya.

s well as boosting the country’s exports.

It will serve a growing market of more than 14 countries – that includes Uganda, Tanzania, Rwanda, Burundi, Ethiopia, Djibouti, DRC and South Sudan.

Mr. McCulloch commended President Kenyatta for his efforts in boosting local manufacturing through his government’s Big Four Agenda saying it will contribute to the expansion of employment and business opportunities for Kenyans, while cementing the country’s position as a leading industrial hub in Africa.

“Increased capacity and efficiencies made possible by this new facility will contribute significantly to the scaling up of our already existing entrepreneurship program. So far, over 1,000 youth and women from across the country have benefited from the program we call Maua. With the support from government and other partners, we hope to increase the number to 5,000 in the next two years,” Added McCulloch.

Maua is the company’s entrepreneur accelerator program designed to empower individual entrepreneurs as well as create large networks of micro-entrepreneurs and micro-distributors.

“As government, we remain committed to supporting local industries as part of the Big Four agenda under the manufacturing pillar. Our intention is to transform the country into a competitive global economy and improve the lives of Kenyans.” said President Kenyatta.

He added that the company’s decision to invest in Kenya on such a substantial scale is a clear affirmation of the country’s position as an attractive investment destination.

Mars Wrigley Confectionery is a global leader in the manufacture of chewing gum, confections and chocolates. The new factory will produce popular Mars Wrigley Confectionery brands, including Big G, PK, Doublemint and Juicy Fruit. Additionally, the company will also look to expand a wide range of their chocolate portfolio in the market.

The factory has the capacity of producing about 7.8 billion pellets of chewing gum annually.

Just recently, the new factory was recognized for adopting green building strategies and practices in its design and construction, becoming the first manufacturing plant in Eastern Africa and one of the few in Africa to achieve LEED GOLD certification status.

LEED, or Leadership in Energy and Environmental Design, is the most widely used green building rating system in the world. It is run and managed by the U.S. Green Building Council (USGB), a non-profit organization that promotes sustainability in building design, construction, and operation. It is a prestigious rating for environmentally conscious buildings and sites.

Mars Wrigley Confectionery is the world’s leading manufacturer of chocolate, chewing gum, mints, and fruity confections. Once the planned worldwide integration of the Mars Chocolate and Wrigley businesses is complete, Mars Wrigley Confectionery will employ over 34,000 Associates globally and have operations in approximately 70 countries.

Headquartered in Chicago, Mars Wrigley Confectionery will distribute its world-famous brands including M&M’s, Snickers, Twix, Skittles and Orbit in more than 180 countries.

In Kenya, the company has its headquarters in Athi River and has been operational since 1969.

 

Uganda-Rwanda tiff scares Bamburi cement as profits drop

2018 profits dropped to US$6.1 million from US$18.8 million in 2017

Cement manufacturers-Bamburi Cement has expressed concerns over the Uganda-Rwanda border row, warning it could derail its earnings.

This comes amid a drop in net profit for the year 2018, reported at Ksh614 million (US$6.1 million) down from Ksh1.9 billion (US$18.8 million) in 2017.

“The difficulties experienced in the Uganda-Rwanda border have significantly impacted exports to Rwanda from Uganda and the Group hopes this matter is resolved expeditiously,” the company said in its financial statement signed by Chairman John Simba and Group Managing Director Seddiq Hassani.

The Nairobi Securities Exchange (NSE) listed firm has however reported a 3.7 per cent jump in turnover, from Ksh36 billion (US$3.6 billion) in 2017 to Ksh37.2 billion (US$3.7 billion) in 2018 as cement volumes grew by nine per cent.

“The Group achieved this growth despite a market decline of five per cent in Kenya, our biggest market, and a flat cement market in Uganda. Increased competitive pressure fuelled by a growing gap between installed cement grinding capacity and the shrinking market has played a key role in market dynamics,” the firm has said.

However, the overall top line growth in a declining market is a clear indication that the execution of its “Building Growth” strategy has put the firm on solid track to consolidate its market leadership position.

The group operating profit reduced to Ksh800 million (US$7.9 million) in 2018 from Ksh4.2 billion (US$41.6 million) in the prior year.

Despite the increase in turnover, there was a higher cost environment relating to higher energy costs (power, coal and petcoke), imported clinker and raw materials’ input prices, the firm has noted.

Uganda was further impacted by additional provisioning mainly on receivables. The net result of all these being that operating profit in Kenya remained flat compared to 2017 and declined in Uganda.

Cash generated from operating activities as Ksh3 billion (US$29.7 million) was lower than for prior year at Ksh5 billion (US$49.5 million), mainly on account of lower operating profit.

Uganda closed the year in a net borrowing position; while Kenya remained cash positive, the company’s financial indicate.

In the second half of 2018, the Group completed the first phase of the capacity expansion projects both in Kenya and Uganda, at a total cost of Ksh7.9 billion (US$78.2 million).

“These have put us in a strong position to leverage growth opportunities in our markets and to further solidify our market leadership position,” the management notes.

The market is expected to rebound in both countries in 2019 thigh fears remain on the export market mainly products to Rwanda from Uganda.

The group will continue to execute “Building for Growth” strategic agenda , while maintaining focus on cost of optimization in order to grow profitability and competitively.

The board has recommended payment of a final dividend of Ksh4.10 per ordinary share.

READ:Bamburi cement warns investors of profit slump in 2018

ALSO READ:Kenya, Uganda markets blamed for 66% drop in Bamburi cement’s profit

 

 

City of Cape Town supports growing boat building industry

The City of Cape Town has announced a range of measures to support the local boat building industry to position it as a premier global hub for this fast-growing industry.

Cape Town is the largest boat building city in South Africa and the second largest producer of recreational catamarans globally.

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“Cape Town’s boat building industry has grown by 28.8 per cent year-on-year since 2012,” the City’s Mayoral Committee Member for Economic Opportunities and Asset Management, James Vos, said at an event this week. “The industry exports 90 per cent of the products produced and attracts a positive trade balance of around US$73 million (over R1 billion) annually.

“The 40-plus boat yards and 3,500 specialist staff produce award-winning super-yachts,” he said. “The city is home to 70 per cent of South Africa’s boat builders.”

Vos said the City was keen to support sectors such as the boat building sector to facilitate accelerated economic growth, job creation and economic inclusion through skills development.

“In fact, during our recent mission to the United States, we collaborated with SABBEX/Boating South Africa and the South African Embassy to promote Cape Town’s boat building sector at the Miami International Boat Show,” Vos said.

“We have commissioned research into the boat building economy that will be completed in May 2019. This will give us a clearer picture of how best to intervene in the 11 sub-sectors for better growth, job creation, training and sustainability.”

The City said that boat building was an important sector to the local economy and city leaders saw the Mother City as the hub for the sector in South Africa.

“About 85 per cent of all national boat builders are located in the Western Cape, with the bulk of the industry being based in and around the metro.”

According to SABBEX, the boat building industry is worth R1,4 billion annually while it is estimated ocean sports can bring in R1,2 billion per year.

According to the City, every year close to 200 cruising yachts passes around the Cape from the Indian Ocean en-route to the Caribbean.

“This cruising community is very close-knit and positive sentiment spreads fast. Therefore, it is important for all of us to work together to tap into this market,” Vos added. “We know that investors look for a clean government partner that is reliable and provides an enabling environment for businesses to develop, grow and create jobs.

“In Cape Town, we also know that just providing clean governance and basic services is not enough. We are proactively assisting with skills development and the expansion of key catalytic sectors that are positioned to grow and stimulate job creation.”

Vos said the engagement with the local boat building industry under the banner of Invest Cape Town allowed for discussions on how best to support the industry, including skills development and access to land.

He added that the City would look to attract more boat manufacturing opportunities to Cape Town that are geared to the European market, secure new orders for catamarans to give the local manufacturers a welcome boost, and to forge closer ties with American boat show organisers.

Local boat building outfit Two Oceans Marine Manufacturing, founded in 1989, has evolved into one of South Africa’s leading custom catamaran manufacturing yards and one of a handful of big custom catamaran manufacturers in the world.

The company manufactures both power and sailing catamarans, ranging in size from 7.3-35m – for cruising, leisure, day charter and commercial use.

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With 30 years’ experience in quality boat building, the staff and production team at Two Oceans Marine Manufacturing are actively involved in all sailing, boating, fishing and watersport activities and share a wealth of knowledge and experience in all aspects of the sport – and the boats used.

The company developed from humble beginnings, as an extension to a petrol service station, into a fully-fledged design and manufacturing facility for ocean-going craft, with 4,500 square meters of covered factory floor space on two different premises, one in Cape Town harbour and the other 3km from the harbour.

Two Oceans Marine Manufacturing spearheaded the introduction of power catamarans to the Cape Town market, and today, the local tuna fishing fleet consists almost exclusively of power catamarans.

According to the company, extensive testing is performed on all new production boats, prior to the completion of moulds.

“We are fortunate to have on our doorstep access to some of the most demanding sea conditions the world has to offer in the seas of Cape Town in which to perform these tests,” the company said. “Potential clients can fly to Cape Town, sea trial the vessel of their choice, visit the factory to witness the building methods, and the materials used in production, customise their choice of vessel, and then fly home on the same day.

“Completed vessels are launched and sea trialled within a short distance of the factory, thereby saving time and unnecessary expense on travel.”

US electric motorcycles company ALYI to set up in Kenya amid $1.5 million orders

ALYI has revealed that a commitment to open a plant in Kenya is part of an overall deal that would include the initial order of 2,000 ReVolt Electric Motorcycles.

Alternet Systems, Inc.  (ALYI) has announced a prospective order for two thousand of its ReVolt Electric Motorcycles which would total $20 million in sales as it readies to make Kenya its manufacturing base of its motorcycles.

ALYI has already announced $1.5 million in confirmed orders for its ReVolt Electric Motorcycles to be delivered in Kenya. The company has also recently announced that management will meet potential partners and tour facilities next week in Kenya looking to possibly open an assembly plant to complete manufacturing in Africa for ReVolt Electric Motorcycles to be sold accross the continent.

The company has further revealed that a commitment to open a plant in Kenya is part of an overall deal that would include the initial order of 2,000 ReVolt Electric Motorcycles. The Kenyan trip will include meetings with additional potential partners expected to further advance ALYI’s electric vehicle interests in Africa beyond the company’s ReVolt Electric Motorcycles.

ALYI is focused on offering varied, environmentally sustainable, energy storage solutions for targeted markets, including consumer electric vehicles and military applications. The first product category is lithium battery-powered motorcycles, to be followed by motorbikes.

ALYI also has an ongoing hemp energy storage initiative leading its current efforts to introduce an alternative to lithium batteries.

The current global market for motorcycles, scooters and mopeds is approximately 130 million units per year resulting in $120 billion in annual sales.  As per capita income in developing economic regions continues to improve, motorcycle, scooter and moped sales are correspondingly expected to grow.  Global automobile sales in 2018 was expected to reach just 80 million units.

ReVolt has started with the production of retro-classic designs for the US market and will later introduce a utility daily driver for everyday transportation in developing economic regions.