BIDCO A KENYAN CONSUMER GOODS MANUFACTURER PLANS TO INVEST $200 MILLION
By Paul Ndiho BIDCO a premiere East African manufacturer of edible cooking oils, baking products, personal hygiene products, laundry detergents and soaps, will invest about 200 million US dollars by 2017 to meet increasing demand. The Family-owned conglomerate earns 250 million US dollars a year from its operations in Africa. It has factories in neighboring Uganda, Tanzania and Rwanda. Managing Director, Vimal Shah said last week that the group expects its annual revenue from Kenya to grow by four times in the next couple years largely due the increased investment and demand for consumer goods. “According to us, East Africa if you look at all the figures, east Africa is going to become… today we are at 130 million people, it’s going to be 400 to 500 million people by 2050 east Africa alone. So when you look at all that, that demand, its demand led all this growth that’s coming in is demand led. Its consumption, it’s a consumption story, right? And that’s what it’s going to be.”
Bidco, which makes Kimbo vegetable fat, various margarine and soaps, will add staples like wheat, rice and sugar to its product range through the investments, which is being funded mainly through bank debt. The growth plan may, however, be curbed by a lack of suitable land to cultivate raw materials in Kenya. In neighboring Uganda, Bidco has only managed to plant 10,000 hectares of palm oil out of an initial target of 26,000 hectares. “Well that’s a suitable place and that’s where the public private partnership was done with the Ugandan government, that’s where they actually gave the land, but it can be done around the lake. It can be done around the lake in Kenya too, but land availability is a big problem in Kenya.” The Ugandan plantation supplies less than 15 percent of the firm’s requirement for palm oil. Undeterred, the company is casting its eye to other crops used in production, offering small-scale farmers in Kenya purchase contracts. “We are in agribusiness and we are looking at from the soil to the frying pan so we are revamping our agricultural activities in east Africa, especially in Uganda and also in Kenya. We are looking at sunflower, soya beans on a massive scale so we can get most of our raw material from local sources. Shah reckons that the risks on the continent, like rampant youth unemployment, could be turned into an opportunity by African governments through training of young people. “When you look at the risk perspective, the risks are very low. When I look at it, I look at it from an inside out perspective. I am born here; I am brought up here and I see it from an African point of view. Perceptions about doing business in Africa are changing rapidly perhaps due a steady economic growth registered by most countries. Business analysts say that Africa is next frontier and six out of ten fastest growing economies in the word are on the continent.