Ndegwa family sells agriculture equipment firm to businessman

The Philip Ndegwa family has sold its agriculture and hospitality equipment company G-North & Son Limited to businessman Paul Wanderi Ndung’u.

Mr Ndung’u recently took control of the company after buying out the Ndegwas for an undisclosed amount.

“I bought (G-North) to diversify into the agricultural sector. Agriculture is widely recognised as the next big thing,” said Mr Ndung’u, who is now the company’s chairman, in an interview.

G-North imports and distributes a wide range of agricultural and hospitality equipment in East Africa including ploughs, irrigation systems, washing machines and commercial kitchen fittings.

The company, which operates agricultural, catering, irrigation and laundry divisions, was incorporated in 1963.

The transaction could be valued in hundreds of millions of shillings, even though Mr Ndung’u declined to disclose the purchase price.

The family’s patriarch, the late Philip Ndegwa, emerged as one of the leading Kenyan businessmen in the 1970s with interests in vehicle franchises, property and quoted equities, among others.

The Ndegwas’ current interests include substantial stakes in NIC Bank, insurance firm ICEA Lion Group and several property developments in Nairobi.

James Ndegwa, a director in most of the family businesses, was recently appointed the Capital Markets Authority (CMA) board chairman.

READ: Ndegwa to stay at NIC despite CMA conflict fears

The acquisition gives Mr Ndung’u a presence in the hospitality and agricultural equipment sector that is expected to record significant growth on the back of major investments by the government and private investors.

The government, for instance, is investing billions of shillings in the one million acre Galana-Kulalu irrigation scheme at the Coast, one of the largest agricultural projects in the country.

It is also partnering with private investors in the scheme estimated to require hundreds of tractors and other agricultural equipment like seed drills and harrows, which G-North supplies.

Treasury secretary Henry Rotich said in his June budget speech that Sh3.5 billion would be spent on the first phase of the Galana project in this financial year alone, with Sh10.3 billion going to other irrigation projects. The investments are meant to promote food security in the country at a time when the population is growing rapidly at about one million people annually.

READ: Galana irrigation scheme ready for its first planting

Private investors are also eyeing demand for horticultural products, including flowers and vegetables, from external markets including Europe, the Middle East and Asia.

Other large-scale agricultural projects include the proposed Tana Delta (Tarda) sugarcane farming project announced by Mumias Sugar Company and which will cover thousands of acres.

Besides the big projects, G-North also targets medium and small scale farmers with equipment like milking machines and milk cooling plants.

G-North’s catering and laundry equipment units are also expected to benefit from the growth in the number of hotels, restaurants and hospitals which constitute the majority of the company’s institutional clients.

The acquisition has further expanded Mr Ndung’u’s business interests that include ownership of several private businesses and shares in publicly traded firms.

He is a major owner of Mobicom Kenya Limited, which became the largest dealer of Telkom Kenya in 2010 after moving from Safaricom where it was also the biggest dealer.