Car & General (C&G) #ticker:CGEN has invested Sh393.5 million in a new motorcycle helmet plant in Ruiru as it looks to grow its share of the bike accessory market in Kenya.
The Nairobi Securities Exchange-listed firm, which has diverse operations including property investments, poultry and sale of motorcycles, said the plant sits on 40,000 square-feet employing about 150 workers.
The plant has a capacity to produce 768,000 helmets per year, with plans to increase production to 1.2 million by 2022.
“The plant situated in Ruiru produces helmets that we intend to export to other markets in East Africa,” C&G chief executive Vijay Gidoomal told the Business Daily on Friday.
“The main thinking behind the establishment of this plant is to improve the safety of our riders on the road.”
Mr Gidoomal said the investment amount includes Sh124 million that was spent in acquiring machinery from India for the production of helmets.
The firm estimates that the new plant will raise at least Sh161.7 million in revenue by close of 2021.
C&G reported a 50 percent rise in net profit to Sh274.1 million for the year ended September 2020, helped by a larger tax credit and reduced costs.
C&G said it would have posted a larger profit if the local currency had not depreciated meaningfully in the review period.
The company added that going forward, earnings would benefit from the leasing of the Nairobi Mega property, along Uhuru Highway, to supermarket operator Carrefour in June last year. Carrefour replaced the previous occupant Nakumatt Holdings which fell into bankruptcy and was subsequently liquidated.
The firm in the meantime invested an additional Sh38.6 million in micro lender Watu Credit Limited, raising its stake in the company to 29 percent in the period.
C&G previously held a 26.5 percent interest in the lender.
The investment in Watu Credit has helped C&G to boost its sale of motorcycles and tuk-tuks. The microlender funds acquisition of the two and three-wheeled autos including brands such as TVS and Piaggio.