Kenyan enterprises defy economic storm to post strong growth
Posted Sunday, October 23 2011 at 19:20
The Top 100 annual survey is an initiative of the Business Daily (a Nation Media Group publication) and KPMG Kenya.
The survey which is in its fourth year seeks to identify and recognise Kenya’s fastest growing medium-sized companies, and to showcase business excellence and successful entrepreneurship stories within this important business segment.
A Top 100 company is one that has succeeded in progressively growing its market position, translating the growth into a fairly sound financial position and good returns for its shareholders, employees and the community over time.
The Top 100 2011 Survey builds on the Year 2010 Survey theme, “One Market, More Opportunities” and reflects the immense opportunities available to mid-sized companies within the East African Community (EAC) Common Market.
From the survey, it was clear that a number of businesses are doing brisk business and even beyond, but more needs to be done to encourage businesses to venture into the region.
A total of 246 companies participated in the 2011 Survey. Over 70 per cent of these companies had a turnover of Sh70 million to Sh399 million, had been in business for over 10 years and were locally owned. During the year, 4 companies graduated to Club 101, an elite grouping of Top 100 companies that have crossed the Sh1 billion turnover mark.
Overall, the participants showed robust growth in staff numbers with the number growing at an average of 12 per cent since 2008. However, between 2009 and 2010 growth slowed to seven per cent.
This year, 75 per cent of participating companies indicated that they are likely to hire more employees in the next twelve months as a result of expansion, need for specialist staff and new projects.
About 75 per cent of the survey entrants had over 26 staff with the number of companies with over 50 staff increasing by four per cent to 50 per cent of the participants.
Positive employment outlook
The positive outlook and the growth in staff numbers should encourage policy makers to give more incentives to these companies to help tackle the unemployment problems facing the country.
Source of set-up and expansion capital
The founder’s savings was the most common source of start-up capital for 71 per cent of the companies with loans from banks and family in second and third position at 26 per cent and 18 per cent respectively.
For expansion capital, 72 per cent of the companies relied on bank loans, 20 per cent on savings with seven per cent of the companies taking on new equity partner.
Enterprise is ultimate show of patriotism
Posted Sunday, October 23 2011 at 19:11
In this fourth year of the Kenya Top 100 survey, we are once again celebrating achievement, resilience, confidence, hope and patriotism in diversity!
For if you are in the right business, and you are doing it right, you are based here in Kenya, employing Kenyans, paying your taxes in Kenya, exporting from Kenya, remitting foreign exchange earnings back to Kenya, and re-investing in Kenya, you are the true Kenyan patriot.
I do not know of a greater demonstration of patriotism than contributing to the wealth of the nation.
Every single company that participated in the survey deserves to be celebrated and recognised!
The Top 100 survey, conference and award dinner are designed to celebrate and recognise that patriotism, that contribution to the collective well being of the country.
In doing so, we hope to give you an opportunity to share and learn from each other.
To encourage and inspire each other and to build bonds that will benefit you personally as well as your business.
We are alive to the turbulence and uncertainty in our world today and our focus on ‘learning and encouragement’ is deliberate.
We know that there are complex challenges facing Kenya, Africa and the world.
All these challenges affect the market for our goods and services, the environment we operate in, the cost of doing business and ultimately, the quality of life in our country and the region.
We also know this: challenges and shocks are an almost permanent feature of economic life, of any business, and of life itself.
Our focus on ‘learning and encouragement’ is intended to equip us to continue to succeed in spite of all these challenges.
It is intended to prepare us to adapt and thrive even if more challenges emerge. Learning is intended to prepare us to recognise opportunity, to harness and harvest its proceeds before our competitors can say stop!
Allow me to make some suggestions on how this culture of learning and performance can be embedded in your business.
First, you need to maintain focus! Be clear on the business you are in and stay in it! Do not be distracted or spread yourself too thinly.
If you must expand, expand within your core business. Do not take away from your current business. Hold on to the good you have—especially good people and cash! These can make the difference between poverty and prosperity for your business.
Kenya needs more innovators
Posted Sunday, October 23 2011 at 19:05
Dear entrepreneurs. It is the fourth year since we launched this noble initiative to honour those who create wealth and jobs for our country.
This year’s event has taken place in the middle of immense economic challenges that affect all of us either as businesses or individual consumers. Inflation is up and the shilling has plummeted to a level not seen before.
My own take is that this, in fact, is the right moment to bring together and recognise this group of innovative Kenyans with the potential to find long term solutions to the challenges we face.
So much has been said about the possible causes of the shilling’s troubles, but let me direct your thoughts to where the problem really lies — the balance of payment as measured in terms of our thirst for imports verses the amount of dollars we have to do so.
One factor that has not dawned on many of us is that the traditional sources of dollars such as exporting agricultural produce to Europe have become less vibrant partly because of economic difficulties of the Euro zone.
That can also be said of other key sources of dollars such as tourism and remittances from Kenyans abroad. Exports to our neighbours are also under pressure. In the 60s, Kenya became the obvious choice as manufacturing hub for the region.
Many consumer goods would be manufactured in Kenya and exported to the rest of East Africa. But with the advent of a free trade called Comesa and the fall of apartheid in South Africa, most of these multinationals have shifted their manufacturing bases for the region to either Egypt or SA.
Manufactured goods are then exported directly to Uganda, Tanzania and the greater Comesa region therefore denying Kenya this traditional source of dollars.
If we are not careful, it is going to get worse because Uganda has discovered oil and will soon be exporting it to us while Tanzania has large gas deposits and is toying with the idea of exporting the stuff to us.
What will Kenya export to these two countries to keep our balance of payments anywhere close to sensible?
These two countries do not need our tea, coffee or horticulture but they have stuff we badly need.
I am convinced that the answer lies right here in the TOP 100 Club.
This is the group that has the right skills and mindset to build great Kenyan companies that will grow beyond our national borders into the regional markets and earn us the dollars to keep our economy steady. It is this group that must create the millions of jobs that Kenya needs to keep a lid on high level of unemployment currently standing at more than 35 per cent.
Kenya must have its own multi-nationals that contribute enough revenue to deliver the Vision 2030 – the bottom-line being that entrepreneurship is Kenya’s only viable long-term answer to economic upheavals such as the recent depreciation of the shilling and slow growth in tax revenues.
Finally, I delighted by the realisation that four more companies Express Automation, Prime Fuels, Manji Foods and Vitafoam have left the Top 100 Club and graduated to the Club 101 having crossed the Sh1 billion ceiling beyond which they must now join the big league.