desert burner
September 15th, 2009, 03:54 PM
Indian firms scramble for a piece of Kenya
http://www.nation.co.ke/image/view/-/657702/highRes/101200/-/maxw/600/-/uvpran/-/MD.jpg From left, Essar Energy managing director and CEO, Naresh Nayyar, Mr Philip Coulson a partner with Coulson Harvey Advocates and Treasury permanent secretary Joseph Kinyua during the signing ceremony of Essar’s 50 per cent acquisition of Kenya’s national oil refinery on July 31. Photo/MICHAEL MUTE
The Indian tigers have descended on Kenya and in the coming months, they may use it as a beachhead into the Great Lakes region. After reaping heavily in the supercharged Indian economy, the rupee billionaire investors are taking a sudden shine to a place with millions of potential customers.
For long painted as an out-and-out corrupt nation and branded an economic backwater, today Kenya — like the rest of Africa — is the new battle field for foreign corporates looking to expand their market.
The frenzy to capture the Kenyan market is now being witnessed in every sector of the economy ranging from manufacturing, telecoms to refineries.
Already, cement making, the hospitality industry and undoubtedly telecoms have attracted immense interest.
The multi-billion dollar Indian Sanghi Group is investing over Sh6 billion ($80 million) in a cement plant that should open Pokot, an arid area of Kenya, for development.
Its local subsidiary, Cemtech, with the support of a number of investors is investing in a one million tonne cement factory in Pokot. The Gujarati-based group’s outfit is set to be the second largest producer after Bamburi Cement, which controls over half the Kenyan market.
Cemtech says it will invest in renewable clean energy but has invited energy, agribusiness and irrigation investors around the plant.
Just like Sanghi Group, Indian-based conglomerate Mehta Group has intentions to set up a cement plant in the same area.
The group plans to put up a 1.2 million-metric tonne cement plant in West Pokot, to cost about $200 million (Sh15 billion) in a phased programme that will be scaled up depending on the available limestone deposits in the area.
Since last year, Mehta Group, through its cement company Glenn Investments Ltd has been busy with the groundwork for the project but analysts point at the intrigues of seeking to invest in the area where Cemtech expects to do its ground-breaking ceremony soon.
As the country reels from a debilitating power shortage, another Indian giant, Danke Electrical Power Group has intentions to manufacture and retrofit transformers and electrical equipment. It has already made its application to the Ministry of Energy.
In the modern economy (telecommunications sector) the scramble for Kenya started with the European mobile telephone giants, Vodafone and Orange but it is the recent furry by the Indian tigers that has livened the market.
“Kenya is proving increasingly attractive to global telecoms looking for growth opportunities outside saturated domestic markets,” Tata Communications managing director for Global Data Solutions, Claude Sassoulas, noted when signing a partnership agreement with AccessKenya that will see the Indian-based corporate make its entry into the African data market.
The Reliance Group associated with the Ambani brothers, joined the Kenyan fray in 2007 offering to pay Sh8 billion to acquire the Second National Operator licence. The entry never materialised after Reliance was forced to pay on equal term to the winning bid of Sh12 billion placed by the Dubai-based Vtel Holdings.
Reliance, with Bharti Airtel and the Tata Group had bid for a 51 per cent stake in monopoly Telkom Kenya but lost out to France Telecom’s Orange.
A lull followed until Essar Telecom brought out a 49 per cent stake in Econet Wireless International early 2008, opening India’s second largest mobile phone service providers to business in South Africa, Botswana, Burundi, Kenya, Lesotho, Nigeria, and Zimbabwe.
The Ambanis have not given up on Kenya; they are linked to the acquisition of plots next to the Grand Regency hotel, now Laico Regency, and in which Sh1.2 billion is said to have been returned.
The group is said to be in the advanced stages of building two classy hotels in Nairobi, one in Upperhill, after they missed out on the hotel and the parcel. A former CFC boss is reported to be running its Nairobi operation.
The Ruia brothers, Shashi and Ravi, who own the Essar Group have also descended on Kenya. As at early last year Essar had an indirect stake in Essar Telecom Kenya through its 49 per cent holding in parent company Econet Wireless Group.
The $17 billion Essar Group has now bought out Econet Wireless Kenya, becoming the major shareholder in Essar Telkom Kenya (with 80 per cent) and which operates under the yu brand.
Signalling an assault of the region’s telecoms market, Essar Group is also in talks with Warid Telecom, which owns GSM networks in Congo and Uganda and Cote d’Ivoire, to pick-up a substantial stake in the company.
Warid Telecom is a subsidiary of the Dubai-based Dhabi Group, controlled by the country’s royal family. Essar already owns a licence in Uganda to build a $200-million cellular phone network.
The Essar Group’s interest in telecom is well documented with its prime asset in India being its 33 per cent interest in Vodafone Essar Ltd, which is a joint venture with Vodafone Group Plc.
Vodafone Essar is one of India’s largest cellular service providers with 75 million subscribers.
In Kenya, besides Essar Telkom Kenya, it has a 50 per cent stake in Kenya’s oil refinery in Mombasa, having invested $600 million (Sh46 billion). It is expected to contribute generously to its modernisation and probable expansion to accommodate Uganda’s new oil wells.
Zain Kenya, which falls under the Kuwait-based telecom operator, is one of the operators that have attracted many Indian suitors. On July 20, Zain said it was reviewing a possible sale of its African operations ($10 billion) — excluding Morocco and Sudan — after French media and telecom conglomerate Vivendi broke off acquisition talks.
Shareholders of the telecom firm last week confirmed that they are selling a 46 per cent stake to India’s Vavasi Group and Malaysian billionaire Syed Mokhtar al-Bukhary. The transaction attracts a stake value of $13.74 billion.
State-owned Indian telcos BSNL and MTNL (Mahanagar Telephone Nigam Ltd) were also in discussions about joining the consortium.
The Khorafi Group confirmed that it is selling its 11 per cent stake in Zain.
Reliance Communications Ltd (RCom) has also been reported to be in talks to buy the African shop of Zain.
And mid last week, another Indian company Vavasi Group and Malaysian billionaire Syed Mokhtar al-Bukhary announced that they are in negotiations to buy a stake in Zain under a consortium that could bring in the state-owned Indian telcos BSNL and Mahanagar Telephone Nigam Ltd.
For Mahanagar Telephone, Bharti Airtel it will be a delayed entry in Africa market after its earlier attempt to buy into the Kenya market failed. During the bidding for a Second National Operator licence in 2007, Mahanagar Telephone had placed a bid of Sh3 billion which was rejected as it was the lowest.
Last week, Tata Group through its ICT arm, Tata Communications joined hands with Kenya’s AccessKenya to form a point of access to the Internet in Kenya.
The access point will allow Internet Service Providers to access a direct link between Kenya and other world destinations.
Earlier, ISPs in the country needed to buy international fibre through a cable network to London in order to offer Internet links to Asia or South Africa. This meant that all traffic was routed through London rather than through a more direct route.
While Indian corporates are scrambling for either telecoms, manufacturing and refinery, China has already taken control of major infrastructure projects with an estimated 60 per cent of market share.
Mr Julius Kinyua, chief executive officer of Flashcom Ltd, a loop operator says the reason why the Indians are targeting Kenya is because it still has a huge potential for growth especially in the telecommunications services owing to the current low penetration of services.
“The Indians are being driven by the need to grow their businesses. Kenya provides a more conducive environment for foreign investors compared to other markets where governments may restrict foreign investments,” Mr Kinyua says.
For local companies, Mr Kinyua says they might lack the muscle to compete effectively with the Indian firms that have access to large amounts of capital and economies of scale.
“It is a great opportunity for the companies that are acquired as they will be able to access much -needed capital for expansion,” he says.
Mr Jonathan Somen, AccessKenya Group managing director, says India is a global leader in ICT and its corporates are looking for growth and new markets.
“I believe Kenyan companies could be the beneficiaries of the Indian companies coming in with more investment in infrastructure, people and technology,” Mr Somen says.
Essar Telecom’s CEO Srinivasa Iyengar says that for Indian telecoms, the Kenyan market in many ways is similar to that of India and the distribution and marketing challenges are easier to handle compared to Europe and the US.
“Telecom giants have acknowledged the positive developmental changes in Kenya, stimulating the rush by foreign firms to seize opportunities in the telecom sector,” said a source representing one of the Indian firms’ deals in Kenya, but who sought anonymity due to his employer’s restriction.
Then early this year, news that India’s biggest mobile-phone operator, Bharti Airtel, intends to buy Africa’s biggest mobile-phone operator, MTN, broke. MTN operates in more that 17 Africa countries. The discussion are still ongoing with latest news being that the two were working to seal the $24-billion deal by the last week of this month.
http://www.nation.co.ke/magazines/smartcompany/-/1226/657700/-/item/3/-/7u2a64z/-/index.html
http://www.nation.co.ke/image/view/-/657702/highRes/101200/-/maxw/600/-/uvpran/-/MD.jpg From left, Essar Energy managing director and CEO, Naresh Nayyar, Mr Philip Coulson a partner with Coulson Harvey Advocates and Treasury permanent secretary Joseph Kinyua during the signing ceremony of Essar’s 50 per cent acquisition of Kenya’s national oil refinery on July 31. Photo/MICHAEL MUTE
The Indian tigers have descended on Kenya and in the coming months, they may use it as a beachhead into the Great Lakes region. After reaping heavily in the supercharged Indian economy, the rupee billionaire investors are taking a sudden shine to a place with millions of potential customers.
For long painted as an out-and-out corrupt nation and branded an economic backwater, today Kenya — like the rest of Africa — is the new battle field for foreign corporates looking to expand their market.
The frenzy to capture the Kenyan market is now being witnessed in every sector of the economy ranging from manufacturing, telecoms to refineries.
Already, cement making, the hospitality industry and undoubtedly telecoms have attracted immense interest.
The multi-billion dollar Indian Sanghi Group is investing over Sh6 billion ($80 million) in a cement plant that should open Pokot, an arid area of Kenya, for development.
Its local subsidiary, Cemtech, with the support of a number of investors is investing in a one million tonne cement factory in Pokot. The Gujarati-based group’s outfit is set to be the second largest producer after Bamburi Cement, which controls over half the Kenyan market.
Cemtech says it will invest in renewable clean energy but has invited energy, agribusiness and irrigation investors around the plant.
Just like Sanghi Group, Indian-based conglomerate Mehta Group has intentions to set up a cement plant in the same area.
The group plans to put up a 1.2 million-metric tonne cement plant in West Pokot, to cost about $200 million (Sh15 billion) in a phased programme that will be scaled up depending on the available limestone deposits in the area.
Since last year, Mehta Group, through its cement company Glenn Investments Ltd has been busy with the groundwork for the project but analysts point at the intrigues of seeking to invest in the area where Cemtech expects to do its ground-breaking ceremony soon.
As the country reels from a debilitating power shortage, another Indian giant, Danke Electrical Power Group has intentions to manufacture and retrofit transformers and electrical equipment. It has already made its application to the Ministry of Energy.
In the modern economy (telecommunications sector) the scramble for Kenya started with the European mobile telephone giants, Vodafone and Orange but it is the recent furry by the Indian tigers that has livened the market.
“Kenya is proving increasingly attractive to global telecoms looking for growth opportunities outside saturated domestic markets,” Tata Communications managing director for Global Data Solutions, Claude Sassoulas, noted when signing a partnership agreement with AccessKenya that will see the Indian-based corporate make its entry into the African data market.
The Reliance Group associated with the Ambani brothers, joined the Kenyan fray in 2007 offering to pay Sh8 billion to acquire the Second National Operator licence. The entry never materialised after Reliance was forced to pay on equal term to the winning bid of Sh12 billion placed by the Dubai-based Vtel Holdings.
Reliance, with Bharti Airtel and the Tata Group had bid for a 51 per cent stake in monopoly Telkom Kenya but lost out to France Telecom’s Orange.
A lull followed until Essar Telecom brought out a 49 per cent stake in Econet Wireless International early 2008, opening India’s second largest mobile phone service providers to business in South Africa, Botswana, Burundi, Kenya, Lesotho, Nigeria, and Zimbabwe.
The Ambanis have not given up on Kenya; they are linked to the acquisition of plots next to the Grand Regency hotel, now Laico Regency, and in which Sh1.2 billion is said to have been returned.
The group is said to be in the advanced stages of building two classy hotels in Nairobi, one in Upperhill, after they missed out on the hotel and the parcel. A former CFC boss is reported to be running its Nairobi operation.
The Ruia brothers, Shashi and Ravi, who own the Essar Group have also descended on Kenya. As at early last year Essar had an indirect stake in Essar Telecom Kenya through its 49 per cent holding in parent company Econet Wireless Group.
The $17 billion Essar Group has now bought out Econet Wireless Kenya, becoming the major shareholder in Essar Telkom Kenya (with 80 per cent) and which operates under the yu brand.
Signalling an assault of the region’s telecoms market, Essar Group is also in talks with Warid Telecom, which owns GSM networks in Congo and Uganda and Cote d’Ivoire, to pick-up a substantial stake in the company.
Warid Telecom is a subsidiary of the Dubai-based Dhabi Group, controlled by the country’s royal family. Essar already owns a licence in Uganda to build a $200-million cellular phone network.
The Essar Group’s interest in telecom is well documented with its prime asset in India being its 33 per cent interest in Vodafone Essar Ltd, which is a joint venture with Vodafone Group Plc.
Vodafone Essar is one of India’s largest cellular service providers with 75 million subscribers.
In Kenya, besides Essar Telkom Kenya, it has a 50 per cent stake in Kenya’s oil refinery in Mombasa, having invested $600 million (Sh46 billion). It is expected to contribute generously to its modernisation and probable expansion to accommodate Uganda’s new oil wells.
Zain Kenya, which falls under the Kuwait-based telecom operator, is one of the operators that have attracted many Indian suitors. On July 20, Zain said it was reviewing a possible sale of its African operations ($10 billion) — excluding Morocco and Sudan — after French media and telecom conglomerate Vivendi broke off acquisition talks.
Shareholders of the telecom firm last week confirmed that they are selling a 46 per cent stake to India’s Vavasi Group and Malaysian billionaire Syed Mokhtar al-Bukhary. The transaction attracts a stake value of $13.74 billion.
State-owned Indian telcos BSNL and MTNL (Mahanagar Telephone Nigam Ltd) were also in discussions about joining the consortium.
The Khorafi Group confirmed that it is selling its 11 per cent stake in Zain.
Reliance Communications Ltd (RCom) has also been reported to be in talks to buy the African shop of Zain.
And mid last week, another Indian company Vavasi Group and Malaysian billionaire Syed Mokhtar al-Bukhary announced that they are in negotiations to buy a stake in Zain under a consortium that could bring in the state-owned Indian telcos BSNL and Mahanagar Telephone Nigam Ltd.
For Mahanagar Telephone, Bharti Airtel it will be a delayed entry in Africa market after its earlier attempt to buy into the Kenya market failed. During the bidding for a Second National Operator licence in 2007, Mahanagar Telephone had placed a bid of Sh3 billion which was rejected as it was the lowest.
Last week, Tata Group through its ICT arm, Tata Communications joined hands with Kenya’s AccessKenya to form a point of access to the Internet in Kenya.
The access point will allow Internet Service Providers to access a direct link between Kenya and other world destinations.
Earlier, ISPs in the country needed to buy international fibre through a cable network to London in order to offer Internet links to Asia or South Africa. This meant that all traffic was routed through London rather than through a more direct route.
While Indian corporates are scrambling for either telecoms, manufacturing and refinery, China has already taken control of major infrastructure projects with an estimated 60 per cent of market share.
Mr Julius Kinyua, chief executive officer of Flashcom Ltd, a loop operator says the reason why the Indians are targeting Kenya is because it still has a huge potential for growth especially in the telecommunications services owing to the current low penetration of services.
“The Indians are being driven by the need to grow their businesses. Kenya provides a more conducive environment for foreign investors compared to other markets where governments may restrict foreign investments,” Mr Kinyua says.
For local companies, Mr Kinyua says they might lack the muscle to compete effectively with the Indian firms that have access to large amounts of capital and economies of scale.
“It is a great opportunity for the companies that are acquired as they will be able to access much -needed capital for expansion,” he says.
Mr Jonathan Somen, AccessKenya Group managing director, says India is a global leader in ICT and its corporates are looking for growth and new markets.
“I believe Kenyan companies could be the beneficiaries of the Indian companies coming in with more investment in infrastructure, people and technology,” Mr Somen says.
Essar Telecom’s CEO Srinivasa Iyengar says that for Indian telecoms, the Kenyan market in many ways is similar to that of India and the distribution and marketing challenges are easier to handle compared to Europe and the US.
“Telecom giants have acknowledged the positive developmental changes in Kenya, stimulating the rush by foreign firms to seize opportunities in the telecom sector,” said a source representing one of the Indian firms’ deals in Kenya, but who sought anonymity due to his employer’s restriction.
Then early this year, news that India’s biggest mobile-phone operator, Bharti Airtel, intends to buy Africa’s biggest mobile-phone operator, MTN, broke. MTN operates in more that 17 Africa countries. The discussion are still ongoing with latest news being that the two were working to seal the $24-billion deal by the last week of this month.
http://www.nation.co.ke/magazines/smartcompany/-/1226/657700/-/item/3/-/7u2a64z/-/index.html