Kenya Business Lounge, a thread for anyone interested in business in Kenya, and for business professionals who live, work and own business in Kenya.

Kenya attracts an increasing amount of foreign investment across a broad range of sectors, and its rapid expansion and growth makes it an active seeker for modern infrastructure development, technological capacities and business services.
Reforms and improvements have been made to strengthen the private sector to be less dependent on government or natural resources, making Kenya an attractive location for enterprises while considering overseas expansion a competitive market.
Kenya is the most mature, well-established business hub with the largest financial institutions in Eastern Africa.
With a track record of nearly 40 years, Kenya is still the financial services leader in the entire region. The Central Bank of Kenya (CBK), the country’s single regulator, is unquestionably the region’s best and most esteemed regulator. Countries in East Africa look to Kenya when formulating their own regulations and structures, because of Kenya’s tested, transparent and enforced rule of law.
Kenya provides a free, open and transparent environment for businesses and has a globally competitive, value-creation story which focuses on sustainability, skills and good governance.
There is a unique vision for the future, which is based on sustainable and productive economic diversification across various sectors. Kenya is committed to free market and democratic principles as the best means of respecting the rule of law, serving the needs of businesses and individuals, and above all, ensuring the long-term prosperity of its people.

Created by professionals for professionals, this information portal, should aspire to become one of the largest information databanks related to Kenya and East African business.

The Thread is open for professional discussion, and with the audience spanning the globe. This thread is business – oriented, and will assist in presenting a practicable and feasible view of the Kenyan business environment.


All Kenyan forumers let us all do what we can to help Kenya,

Consultancy firm PKF Accountants and Business Advisers, has been appointed receivers of Triton Bulk Storage company Limited on behalf of debenture holders Kenya Commercial Bank (KCB).

Mr David Kabeberi and Mr Piyush Shah, partners with PKF, will serve as joint receiver managers of the company.

At the same time law firm , Macharia Kahonge Advocates,on Thursday filed a notice of change of advocates at the Milimani Commercial Court and replaced Katwa and Company Advocates as defence counsel for the joint managers.

During the proceedings, the court extended temporary orders stopping Triton Bulk Storage (under receivership) from transferring to Fortis Bank of Netherlands, prime properties in Mombasa secured through debentures by KCB and Eastern and Southern African PTA Bank.

Commercial court judge Luka Kimaru said the properties should be preserved pending the hearing of the case on July 21. The orders barring the Dutch bank and Triton from interfering with the assets have been in effect since February.

The land and buildings in Mombasa are secured under debentures by KCB and PTA Bank. The two financial institutions advanced finances to Triton Energy Ltd under a charge on Triton Bulk Storage, a company associated with fugitive businessman Yagnesh Devani.

KCB and PTA Bank together with Triton Petroleum Company (under receivership) want Triton Bulk Storage blocked from selling, interfering or transferring the assets pending the hearing of the case.

The banks moved to court on grounds that Mr Devani was in the process of selling the land and buildings to Fortis Bank for Sh75 million. Triton Bulk Storage has created a charge on the property to secure financial advances from Fortis Bank.

“Under the terms of debentures, Triton is prohibited from transferring, disposing or alienating any part of its properties and assets until the suit is heard and determined,” says suit papers filed by the two banks.

The banks argue that by virtue of the provisions of the debentures, Triton Petroleum were not authorised to charge the property to the third party without their approval as debenture holders.

The properties in dispute are LR No MN/VI/3845/3850/3883.

The properties are registered in the name of Bulk Storage, a sister company of Triton Petroleum, currently under receivership.



By Benson Wambugu
Posted Friday, July 17 2009
www.businessdailyafrica.com

Multi-media firm, the Wananchi Group, is using the national electricity transmission network to build a fibre optic platform expected to open a new front in the bruising battle for control of Kenya’s lucrative media market.

The platform – a product of an agreement between the media firm and Kenya Power and Lighting Company — puts Wananchi on a converged media highway that enables it to compete in television content, internet provision, data and voice transmission markets.

“We are deploying the “design unseen” network in key urban areas that enables us to install our fibre network on KPLC’s electricity poles,” said Suhayl Esmailjeee, the chief operating officer at Wananchi Group.

A national fibre optic network running on KPLC’s power transmission system offers Wananchi the potential to play in TV broadcasting and telecoms markets and a chance to compete in the internet service providers (ISPs).

Replicating KPLCs power transmission network gives Wananchi access to the more than one million electricity customers and substantially reduces the cost of cable TV transmission that is currently only possible with the expensive infrastructure support involving the digging of trenches to lay terrestrial cables.

It gives Wananchi a head-start in the race for control of premium TV market currently under the grip of MultiChoice Africa under the DStv brand but analysts warned that Wananchi could also use the massive bandwidth it offers to transmit self-generated local content making it a direct competitor in the Kenyan television scene.

Because the fibre optic cable can also be used to transmit data means Wananchi Group’s internet service provision arm can use it to take high speed internet to the one million homes and offices that consume electricity supplied by Kenya Power.

For Kenya Power, the fibre networks opens a new revenue stream that will help reverse profitability trends that have been dropping with increasing reliance on expensive thermal power from independent producers to meet rising consumer demand.

Wananchi’s fibre network will run parallel with KPLC’s own fibre optic network that the power firm is building for the planned entry into the data, audio and visual transmission market.

KPLC entered the telecoms market early this year and plans to launch the service in the first half of next year.

Mr Esmailjeee said Wananchi will use the quadruple play transmission system to relay voice, data, video and television images under a converged technology platform. Wananchi’s move is also expected to speed up the ongoing shift in the way consumers access telecommunication services.

A number of service providers have moved from radio wave-based technology – that uses satellites and base stations - to fibre optic links that offer larger capacity and are cheaper to operate in the long term.



By Kui Kinyanjui
Posted Thursday, July 16 2009
www.businessdailyafrica.com

A steep rise in the cost of living in the wake of an economic slowdown has pushed Nairobi into the list of the world’s most expensive cities for expatriates, according to a new survey.

The cost of living index compiled by Mercer, an international human resource consultancy, has ranked the Kenyan capital the 88th most expensive city in world – the very first time Nairobi has made it to the list of the top 100.

The increased cost of living poses the danger of making Nairobi less attractive to international civil servants signalling that locally-based international agencies such as Unep may soon find it difficult to marshal the human capital they need to effectively perform their mandate.

At position 88 out of the total 143 cities surveyed, Nairobi has moved 15 places from position 103 it occupied last year, showing how steep the cost of living has risen in 12 months.

Analysts said the ranking did not come as a surprise citing the dramatic surge in inflationary pressure during the same period that saw the year close with an average inflation rate of 26 per cent.

The cost of living also rose sharply in other African cities included in Mercer’s survey, which is popular with international agencies, multinational companies and governments, who use it to determine pay allowances for international staff.

Human resource executives said high ranking in the list of most expensive cities bears the danger of sending firms

—especially those with large numbers of expatriates —back to the drawing board for a fresh look at the compensation packages.

Growing pressure for higher expatriate compensation could adversely affect ongoing efforts to cut operating costs and ultimately erode profitability.

With the exception of Douala (Cameroon) and Lagos (Nigeria)— which have been ranked as the first and second most expensive cities in Africa respectively— the cost of living in most African cities changed for the worse in the past one year.

At position 88 globally, Nairobi has become the eighth most expensive city in Africa for expatriates and international civil servants, opening a window for other cities to poach staff from locally based agencies and multi-nationals.

“Exposure to multiple economies and currencies is continuing to expose multinational companies to the global financial crisis,” Nathalie Constantin-Métral, a senior researcher at Mercer told the Business Daily.



By Mwaura Kimani
Posted Friday, July 17 2009
www.businessdailyafrica.com

Good decision for a thread. Now lets hope we get extra forum traffic.

Kenyans buy into SA brands
2009/07/22 04:41:00 PM

Nairobi - Kenya's biggest fashion and home goods retailer, Deacons, said on Wednesday its five South African brands were doing well in the east African nation, where consumers have often shunned South African merchandise.

Privately held Deacons has franchises for the South African Mr. Price, the upscale Truworths and Woolworths, Identity and Sheet Street. It has also created two of its own brands, 4u2 and Angelo.

Resisting what they see as aggressive expansion by South African businesses, some Kenyans have not welcomed the better capitalised and well-resourced new entrants, but locally owned Deacons said its experience had been different.

"Deacons did not realise any resistance for the brands," finance and strategy manager Simon Mundu told Reuters.

"Anything that is South African that has come here to invest, failed and gone back ... is because it was a cut-and-paste job. They picked up what they were doing in South Africa into the Kenyan market. For us, we localise it to our market."

Brewer SABMiller is the best known case of a South African company that tried and failed to crack Kenya, as did Stuttafords, a clothing store, and Metro Cash and Carry.

Deacons has been in Kenya since 1958 but went through troubled times in the 1980s when the government banned all clothing imports to support the local textile industry.

The company had been importing clothes from Britain's Marks and Spencer but decided to look south when Kenya rescinded its decision to ban textile imports in 1994, Mundu said.

Deacons now has 18 stores, including three in Tanzania and one in Uganda, and plans to add a couple more in Kenya by the end of the year and a new outlet in Rwanda next year.

Mr. Price, introduced in 2007, is gaining ground and could outperform Woolworths, which has been in the country for about 15 years and is beyond the reach of many budgets, Mundu said.

A new Mr. Price store in downtown Nairobi by the end of the year will target middle class buyers, he said.

Deacons plans to double its stores in five years, at a cost of at least 800 million shillings, Mundu said.

Tighter Belts

Plans to list the company next year were on hold until Kenya's economic situation improves, he said.

"However, the preparation work is still going on," he added.

Although post-election violence in the first quarter of 2008 hit Kenya's economy, Deacons stores are in upmarket malls that were largely unaffected.

"We saw sales we could not believe," he said.

Inflation and an expected increase in electricity costs will have a greater impact on the retailer's performance this year.

Sales in the first six months of 2009 were on a par with a year earlier, but down 8% from what Deacons had projected, Mundu said.

They could undershoot projections by between 10% and 15% by the end of the year, he added, but saw it as only a temporary setback as Kenyans were becoming more fashion-conscious.

"There is a very serious shift. When people walk into the shops, they know what they are looking for. They are now very fashion conscious and want to look like everyone else in the world," Mundu said.

^^
I wonder why they decided to drop their own brand though. I miss those days I would walk into a Deacons store when I was younger.

kenya is very good for business

http://www.nation.co.ke/image/view/-/629450/highRes/90359/-/maxw/600/-/wcshsz/-/LAMU2407B.jpg

The listing of Lamu as a World Heritage Site coupled with plans to build Kenya’s second port in the area have resulted in the escalation of land and property prices.

Local speculators who act as linkmen between residents and foreign buyers have been doing a roaring business.

Expected boom

According to the National Museums of Kenya (NMK), the custodians of heritage sites such as Shella, Ras Kitau, Kipungani, Manda and Lamu Town, the archipelago has become a popular hunting ground for property speculators, especially foreign investors who want to cash in on the expected boom.

Coast region NMK assistant director Athman Hussein said plots that used to sell for between Sh2 million and Sh3 million have shot up to between Sh5 million and Sh10 million.

“Most investors were attracted by the rich cultural heritage that heralds a new clientele comprising rich Europeans who are mainly interested in a serene environment.

“As demand grew, some local people sold their dilapidated houses in the old town to foreign investors for tidy sums,” Mr Hussein said.

Similarly, the fortunes of property owners in the mainland have changed substantially following the announcement that the government was planning to build a new port in the area. The properties are mainly abandoned farms.

“Areas such as Mokowe, Hindi and Kililana on the periphery of Magogoni, the proposed site of the new port, have suddenly assumed new significance and land there is a gem,” he said.

An acre now sells for up to Sh2 million, according to Mr Mohamed Athman, a former councillor.

The listing of Lamu as a World Heritage Site was not by accident. According to a Unesco report, it had all the qualities to join world famous sites such as the Egyptian pyramids and hanging gardens of Babylon in Iraq.

Died down...

http://www.nation.co.ke/News/-/1056/629304/-/ul2en8/-/index.html

^^ I would'nt mind getting a piece of that, the values are going to shoot up in the long term.

Registration Requirements:
Procedure 1. Obtain approval for the company name from the Registrar of Companies
Time to complete: 3 days
Cost to complete: KES 100 per name reservation
Comment: The reservation lasts 30 days but can be renewed for a similar period.

Procedure 2. Stamp the Memorandum and Articles and a Statement of the Nominal Capital
Time to complete: 14 days
Cost to complete: 1% of nominal capital + KES 2,005, stamp duty on Memorandum and Articles of Association
Comment: With effect from 1st January 2005 the Kenya Revenue Authority (KRA) took over the collection of stamp duty from the Ministry of Lands and Housing. As an administrative requirement the KRA now requires the Personal Identification Numbers of the parties on whose behalf documents to be stamped with duty are submitted. Documents have to be first assessed by the stamp duty office before payment can be processed by the KRA's specified banks. The process has lengthened to about 2 weeks as the Stamp Duty office has to receive confirmation of payment from the bank after clearance of funds. Bank handling charges of Shs 100 per transaction are also payable.

Procedure 3*. Pay stamp duty at bank
Time to complete: 1 day (included in the previous procedure)
Cost to complete: KES 100 bank commission

Procedure 4. Declaration of Compliance (Form 208) is signed before a Commissioner of Oaths / notary public
Time to complete: 1 day
Cost to complete: KES 200
Comment: The Advocate incorporating is required to sign a Company Form 208 which accompanies the documents to be submitted to the Registrar of Companies. This form is a Declaration of Compliance with the requirements of the Companies Act.

Procedure 5. File deed and details with the Registrar of Companies at the Attorney General's Chambers in Nairobi
Time to complete: 21 days
Cost to complete: see comments
Comment: Submit stamped Memorandum and Articles of Association, particulars of directors and secretary (Form 201), statement of capital, notice of proposed registered office (Form 203), declaration of compliance (Form 208) and the prescribed registration fees. Registration fees are: Kshs2,200 for the first Kshs100,000 and Kshs120 for every Kshs20,000 after the first Kshs.100,000 subject to a maximum of Kshs.60,000. Filing fee for 3 forms is Kshs.600. It takes 20-25 days to get the approval.

Procedure 6. Register with the Tax Department for a PIN
Time to complete: 1 day
Cost to complete: no charge
Comment: The PIN is valid also for VAT, PAYE, and local service tax. File certificate of registration and a copy of the Memorandum and Articles of Association.

Procedure 7. Register with the VAT office
Time to complete: 1 day
Cost to complete: no charge
Comment: VAT office is in the Times Tower building.

Procedure 8. Apply for a business permit
Time to complete: 1 day
Cost to complete: see comments
Comment: The fee varies by type of business, number of employees and size of business premise. Fee is payable to Nairobi City Council, Licensing Department. The City Council will issue business permit. Cost: Kshs 5,000 (medium trader, shop or retail service from 5-20 employees and/or premises from 50-300 sqm fair location)

Procedure 9. Apply for a trading / operational license
Time to complete: 7 days
Cost to complete: no charge
Comment: The trade license is free, issued by the Ministry of Trade on production of a copy of the business permit. The requirement for obtaining a trade license from the Ministry is often overlooked because the City Council is enforcing the issue of business permits. Nevertheless, the required for trade licenses is still in the statute.

Procedure 10. Register with the National Social Security Fund (NSSF)
Time to complete: 1 day
Cost to complete: no charge
Comment: NSSF provides the employee with a lump-sum retirement benefit. Historically, the rate of return paid by the State is considerably less than that achieved by private schemes but participation is mandatory. The employer pays a standard contribution of approximately 1% of salary subject to a maximum of Shs.400 per month. One half of the contribution is deductible from the employee's salary. The precise amount of the contribution (where less than the maximum) is determined by reference to salary bands.

Procedure 11. Register with the National Hospital Insurance Fund (NHIF)
Time to complete: 1 day
Cost to complete: no charge
Comment: The employee contributes a fixed sum to the NHIF, which must be deducted by the employer from the employees' salary. The maximum contribution is Shs.320 per month. The contributions are used to offset the costs of medical treatment but they only cover a fraction of actual costs. Hence, most companies put in place medical insurance cover for employees.

Procedure 12. Register for PAYE
Time to complete: 1 day
Cost to complete: no charge

Procedure 13. Make a company seal after a certificate of incorporation has been issued
Time to complete: 2 days
Cost to complete: KES 2500

Note: Procedures sometimes take place simultaneously. Instances of this are marked with an asterisk (*).

When greeting a Kenyan, be sure to inquire about his or her health and family. This is considered courteous, because it shows a genuine interest in the person you are conversing with. Greetings are very important in Kenyan culture, so it's important to never rush though the greeting process.

Although Kenyan culture is very different from ours, you will find that Kenyans are incredibly polite to visitors. Return their kindness and respect their culture by following their etiquette. Below is a list of Kenyan etiquette for you to keep in mind on your trip to Kenya.
1. What to wear

1. DO dress formally for business occasions. For men, wear a suit and tie. For a woman, wear a dress or suit, but make sure the skirt is below the knee. Women will not usually wear pants in a business meeting.
2. DON'T wear tank-tops or tight, revealing clothes if you are a woman. Some areas are Muslim, so it's best for women to dress modestly.
3. DO dress less formally for casual situations. Sneakers are fine for casual attire. Shorts are acceptable for a safari, but they're not usually worn by Kenyans.

2. Food/Drinks

1. DO behave formally when dining with Kenyans. Kenyan dining etiquette may vary.
2. DO wash your hands before and after eating.
3. DON'T use your left hand while eating.
4. DON'T begin eating until the oldest male begins.
5. DO take only a little bit of food the first time you are served so you have room for second helpings.
6. DON'T expect beverages with your meal. Kenyans believe it's impolite to drink and eat at the same time. You'll probably be served a drink afterwards.
7. DO finish everything off your plate. It's not necessary, but it's a polite thing to do.

3. Tipping

1. DO tip in the following fashion:

1. Tip baggage porters kshs 50-100.
2. Tip bar staff kshs 20-30 per drink per round.
3. Tip waiters kshs 50-100.
4. Tip safari guides kshs 500 per person per day.
5. Tip hotel room staff kshs 50 per day.

4. Gift Giving and Accepting Gifts

1. DON'T give or receive gifts with the left hand. Use the right hand only, or both hands for larger gifts.
2. DO give practical gifts.
3. DO wrap a present nicely.
4. DON'T give alcohol unless you are certain the recipient drinks.

5. Greetings

1. DO greet with a handshake. Close female friends will sometimes hug and kiss each other on each cheek.
2. DO grasp the right wrist with your left hand when shaking hands with an elder. It shows respect.
3. DO remember that Muslim men and women may not shake hands with the opposite sex.
4. DO ask questions when greeting. Appropriate questions are about the person's health, family, etc.
5. DO say "Jambo?" while greeting, immediately after a handshake. "Jambo?" means "How are you?"

6. Visiting Someone's Home

1. DO bring your hosts a gift, such as dessert or flowers. Tea and sugar are common gifts in the more rural parts of Kenya.
2. DO remove your shoes before entering.

7. Business

1. DO make time for small talk during a business meeting. Personal relationships are very important in Kenya. Ask about their families.
2. DO communicate diplomatically. Directness is uncommon in Kenya.
3. DON'T show anger. In Kenyan culture, displays of anger means mental instability.
4. DO present and receive business cards with both hands.
5. DO be flexible. Sometimes meetings will be very structured (especially if it's with an Indian or British owned company), sometimes they won't.

8. Socializing/Conversation

1. DO learn a few works in Kiswahili. Kenyans usually like when guests to their country try to make an effort to speak their language.
2. DO understand that women over the age of 21 will often be referred to as "Mama" and men over the age of 35 are often referred to as "Mzee." Children will often refer to all adults as "Aunt or Uncle."
3. DON'T kiss or hold hands in public.
4. DO understand that Kenyans will sometimes use analogies, metaphors, and stories when conversing. This is to avoid bluntness.
5. DON'T speak loudly, although in more rural areas Kenyans may speak louder.

9. Photography

1. DO ask permission before photographing someone.

10. Safari Etiquette

1. DON'T imitate animal sounds, throw objects, or corner a wild animal. You never know how an animal will react, and it could be dangerous.
2. DO listen to the guide. Respect their judgment; they're the expert!
3. DON'T smoke while on a safari.
4. DON'T litter. It's disrespectful and can be dangerous to animals. If you bring something in, take it out with you.
5. DON'T take anything you find while on a safari.
6. DON'T feed animals.
7. DO take photos while on a safari in National Parks.

While traveling to Kenya, be friendly and kind to people and remember to always keep an open mind. When in doubt, follow the lead of those around you. You will catch on in no time! Safe and happy travels to Kenya!

Source: http://www.vayama.com/kenya-etiquette

what do you guys think?

http://www.nairobiguardian.com/?p=65

Guys,any idea how long this paper has been in existence?

..