Nairobi Star
23
Monday, 17 September 2007
STAR BIZ
Practical tips on handling
personal finance
NEWS YOU CAN USE, EVERY DAY.
Agriculture
to play
top role in
vision 2030
THE UCHUMI
CONUNDRUM
There are many patriotic
Kenyans holding Uchumi
paper. Herein lies a lesson as
an investor, one of the key
disciplines is to be able to
convert paper- we are now
a paperless society but the
point is the same- into cash at
all times.
In investing, patriotism
whilst noble cannot measure
up to hard headed economics
and analysis.
Had you invested your
hard earned savings in
Uchumi, you would have been
effectively locked out of other
opportunities and this has
carried a heavy cost for some.
Each proposed rescue plan,
and there have been so many
its nearly farcical, reminds me
of a Dutch story about a little
Boy and a dyke. Water starts
to break through the dyke and
the little boy keeps plugging
holes with his fingers until he
is completely overstretched
and he gives up.
Every proposed rescue
plan has been so desperately
under-funded as to be
practically willfully negligent.
Clearly in our resurgent
economy today, there
is plenty of room for a
successful and thriving
Uchumi brand.
This past week, Uchumi
managing director Jonathan
Ciano announced that the
supermarket was looking
for a strategic investor and
I congratulate him on finally
getting to the rub of the issue.
We live in a global
village now and it makes
perfect sense for Uchumi
shareholders to give up some
equity in order to get on
board, a credible, experienced
and international partner.
I would urge Ciano to open
a dialogue with Asda and
Walmart. They will bring price
sensitivity for the consumers
and build a long lasting,
successful and powerful
business.
After all, the model has
worked for Kenya Airways
which brought in KLM and
EABL which got on board
Diageo, just to name two
examples. Carpe Diem.
Uchumi closed down in
June 2006 after 30 years
of business. Its closure was
described as one of the
greatest corporate disasters
in independent Kenya history.
However, a government-led
rescue plan was initiated and
consequently five Uchumi
outlets, all in Nairobi, were
reopened in July 15, 2006.
Uchumi was founded in 1975
and listed on the Nairobi Stock
Exchange in 1992.
Aly-Khan Satchu www.rich.
co.ke is the author of the book,
Anyone Can Be Rich, available
in local bookshops.
4 TO BUY
t
KPLC (Sh252)
Recent profit taking providing a good entry point. Buy for
long term.
ACCESS KENYA (Sh18.50)
We will vault 20 soon. Buy.
Mumias (Sh40.50)
Buy for medium term.
Athi River Mining(Sh95.50)
Overwhelming cement demand continent wide Price
breaking above 95 resistance.
t 1 TO SELL
NBK (Sh46.25)
Still no strategic direction.
Shares go up and down and readers are advised that this column represents Mr Satchu’s
personal opinions.
NEW PRICES: Crown Berger Chief Executive Officer Rakesh Rao in his office.
crown berger
TO RAISE Prices
by peter kiragu
Paint manufacturer, Crown
Berger will increase prices of
its first quality paint products
by 7 per cent from October 1.
Managing director Rakesh
Rao however said the price
review will not affect the company’s economy line of products, which form the bulk of
its product portfolio.
Kenya’s paint industry has
been thriving on an upbeat
construction and healthy
economy.
As a result of a real estate
boom, the Kenyan market for
residential paints and wall
coatings continues to maintain
a relentless upwards march of
between 10 and 15 per cent a
year.
The windfall is, however, affected by the blows the industry has suffered as a result
of high cost of inputs. “We
have seen a marked growth
of between 15 and 20 per cent
across the board.
This growth is however
threatened by the rising costs
of oil and titanium dioxide,
the two main ingredients in
paint manufacturing,” Rao
said.
“We don’t expect the
change in prices to affect our
sales volumes drastically since
it will affect only the first line
product which is a small segment,” he says.
Input prices for petroleumbased solvents like mineral turpentine oil have been growing
at 5 to 7 per cent, but manufacturers have resisted hiking
product prices hoping that
prices would come down.
Oil prices have been rising in
the world market and is currently retailing at Sh5,226 a
barrel up from Sh3,685 at the
beginning of the first quarter
of 2007.
Also recently, DuPont Titanium Technologies, the world’s
largest manufacturer of titanium dioxide, serving customers globally in the coatings,
paper and plastics industries
announced a price increase for
its product effective October 1
this year.
This increase, DuPont says,
is driven by the significant increases in raw material, energy
and fuel costs over the last few
years.
Rao said these high costs on
raw materials were becoming
a big challenge for paint manufacturers as most of them
had to be imported.
More than 15 small and
medium size companies are
engaged in paint production
in Kenya, out of which only
three are dominant players.
Agriculture will play a
vital role in the realisation of
Vision 2030. Finance minister Amos Kimunya noted
that agriculture was among
the three pillars identified
as key to the realisation of
the vision. He said the sector would be allocated more
resources in order to increase
production.
The minister said the Government would continue with
the rehabilitation and expansion of irrigation schemes
and strengthening of land
management and tenure systems in an effort to enhance
better utilisation of high and
medium potential areas in the
country.
He added that increased
market access to small-scale
farmers, management of the
environment and natural
resources were all geared
towards improving growth
of the sector. The sector recorded a 6.9 per cent growth
in 2005 up from 3.1 per cent
in 2002.
Kimunya made the remarks
at Miharate trading centre
when he officiated over the
launch of the Nyandarua
District Horticultural Crop
Development Authority
(HCDA) station. There are
18 such stations countrywide.
Other stations are located in
Bungoma, Kisii, Homabay,
Kajiado, Garrissa, Mogotio
and Nyandarua, among other
places.
Under Vision 2030, Kenya
sees itself transforming into
a middle income, prosperous
country, providing a high
quality of life for all citizens.
The vision has singled out
three pillars on which to realise its goal the first being to
achieve an average economic
growth of over 10 per cent
yearly over the next 25 years.
Users to pay water bills at Nakumatt
Photo/jack owuorI
Nakumatt supermarkets
and Nairobi Water Company have sealed a deal that
could see city residents pay
their water bills at any of the
chain’s Nairobi branches.
Out of 19 Nakumatt
outlets countrywide, 12 will
serve as NWC pay points.
The two organisations are
currently engaged in an Information Technology (IT)
systems testing and alignment
programme to ensure compatibility ahead of the formal
service launch.
Speaking when he presided
over the launch of the new
NWC Westlands customer
care centre last week, Na-
kumatt operations director
Thiagarajan Ramamurthy
confirmed the partnership.
He at the same time disclosed
that the chain had recently
installed a Sh20 million IT
switch to facilitate interconnection to other service
providers such as banks and
other utility organisations.
“As part of our corporate
commitment to enhance our
customers’ convenience and
shopping experience, we recently installed a computer
switch that enables us to interconnect with other service
organisations and conduct
transactions on a real time
basis,” he said.
“With this new software,
we are able to connect and
share customer data with our
partners from our tills enabling them to conveniently
withdraw cash at our tills or
settle their bills at any of our
branches.”
Ramamurthy said when
unveiled, the new service will
be available across the 12
Nakumatt branches in Nairobi including the one operating for 24 hours. “In the
emerging lifestyle trends, we
must recognise the fact that
customers want to conduct
all their transactions such as
banking, shopping and paying bills in one place”.
Thiagarajan Ramamurthy