Thika firm signs concrete poles deal with Kenya Power
Jungle Energy CEO Patrick Wainaina at his Thika factory. Photo/DIANA NGILA
What you need to know:
Kenya Power revised its policy in 2011 to allow use of concrete poles, replacing wooden posts which have a shorter lifespan and are therefore more expensive over time.
Jungle Nuts is a private company that does not publish its annual results, but its top shareholder and CEO says it is “a profitable business.”
Kenya Power spends between Sh2.5 billion and Sh3 billion annually on wooden poles, part of which Jungle Energy is eyeing.
A Thika-based processor of macadamia nuts has ventured into manufacture of concrete poles for electricity distributor Kenya Power, seeking to profit from the energy company’s shift from use of wooden posts.
Jungle Nuts Company has formed a subsidiary, Jungle Energy (K) Ltd, which is behind the Sh1 billion project financed through internal cash reserves and bank overdrafts.
Kenya Power revised its policy in 2011 to allow use of concrete poles, replacing wooden posts which have a shorter lifespan and are therefore more expensive over time.
“We saw an opportunity given it (the use of concrete poles) was new in Kenya (and) had not been fully exploited,” said Jungle Energy chief executive and majority shareholder Patrick Wainaina in an interview.
The company, which in 2012 topped Business Daily’s annual survey of the best 100 small and medium enterprises, is fully-owned by three Kenyans.
The Top 100 survey ranks SMEs that have an annual turnover of up to Sh1 billion, with those that outgrow this sales target such as Jungle Nuts joining a special group called Club 101.
Jungle Nuts is a private company that does not publish its annual results, but Mr Wainaina says it is “a profitable business.”
Kenya Power spends between Sh2.5 billion and Sh3 billion annually on wooden poles, part of which Jungle Energy is eyeing.
The Thika-based firm’s main competitor for the Kenya Power contract is Chinese-owned firm Bett Company, situated on Nairobi’s Mombasa Road.
Jungle Energy has a production capacity of 100 poles per day, with plans to increase output to 200 by August this year.
The Chinese firm has an output capacity of 15 poles per day.
The poles are made using concrete, ballast and sand then moulded in metals frames. Jungle Energy has signed supply deals with Kenya Power and the Rural Electrification Authority (REA).
“We are in talks with Tanzania and Rwanda governments to supply them with concrete poles as we seek to increase our footprint in the region,” said Mr Wainaina.
The company has employed 300 workers and stands on six acres of land in Thika’s Industrial Area, Makongeni, off Garissa Road.
“Concrete poles can last for 100 years compared to wooden poles, which have a lifespan of five years,’’ said Mr Wainaina.
Jungle is counting on increased demand for energy and pressure on the electricity transmitters to cut operating costs for sustained demand for its poles.
Kenya Power communications officer Kevin Sang’ said in a phone interview that concrete poles have played a key role in cutting down the company’s costs that were initially associated with repairing wooden poles.
“Concrete poles though more expensive than wooden poles have longer durability, their pricing is based on size and the tender,” said Mr Sang’.
The concrete poles, Mr Sang’ said, cost an average of Sh16,000 each.
The power distributor was mainly relying on Kakuzi to get wooden poles which has about 905 hectares of commercial plantations.
The concrete poles unit is Jungle Nut’s third subsidiary, in addition to Jungle Housing which produces building bricks from soil, quarry dust and cement.
Jungle Energy also produces charcoal (brickets) from macadamia shells, which are mainly exported to Taiwan but will also be available in local supermarkets. A 5-kg bag of the brickets costs Sh300.
Mr Wainaina founded the nut processing company eight years ago while still working at mobile phone company Safaricom as the roaming services manager. He was previously based in the US.
