Capital Markets

Nuts exporter wins Top 100 SMEs award

Mr Patrick Wainaina,  Jungle Macs CEO, with  a
Mr Patrick Wainaina, Jungle Macs CEO, with a director, Mrs Helen Wainaina , shortly after the company was named the 2011 TOP 100 Mid -Sized companies’ survey winner during a ceremony held at the Carnivore Restaurant on Friday evening. William Oeri  

Jungle Macs, a Thika-based nuts processing company, beat more than 200 rivals to win this year’s Top 100 medium-sized enterprises competition.

The firm, which operates from Thika’s export processing zone, received the top honours at a colourful gala dinner held at Nairobi’s Carnivore Restaurant grounds on Friday night.

It was the first time that a manufacturing company topped the annual survey of medium sized firms, marking a shift of its previous domination by information technology and construction firms.

The survey, which is sponsored by the Business Daily, a publication of the Nation Media Group and KPMG, the consultancy firm honours Kenya’s fastest growing medium sized companies.

Pentapharm Limited, a pharmaceutical company, took home the runners-up trophy as well as the services industry champion award.
The third position went to Kema East Africa, a dealer in personal protective equipment that was followed by P.G. Bison – a maker of building materials, which finished in the fourth place. Mukurwe-ini Wakulima Dairy closed the list of top five winners.
It posted a major improvement from last year’s position 15 and 66 in 2009.

Save for Software Technologies, the rest of the companies that won the top 10 positions last year were knocked off their perch, reflecting the dynamism and competitiveness of the middle segment of the Kenyan economy.

During Friday’s event, four companies — Express Automation, Prime Fuels, Manji Foods and Vitafoam — graduated to Club 101 after having crossed the annual turnover threshold of Sh1 billion.

A total of eight companies have graduated into Club 101 since the competition began in 2008.

The Top 100 medium sized companies competition is reserved for firms with annual turnovers of between Sh70 million and Sh1 billion.

Last year, Mellech Engineering — the winner of the 2009 competition — and Ramco Printing crossed the Sh1 billion mark to join Club 101.

Organisers of the competition said the list of winners and the composition of Club 101 were pointers to where Kenya’s future lies.
“Our country must have its own multi-nationals to realise the Vision 2030 and create jobs for the millions of unemployed youth,” said Linus Gitahi, the Nation Media Group chief executive.

Mr Gitahi said entrepreneurship is also Kenya’s only viable long-term answer to economic upheavals such as the recent depreciation of the shilling and slow growth in tax revenues.

“Uganda has discovered large deposits of oil while Tanzania has liquefied gas deposits and other precious metals that they will soon start selling to us,” he said adding that Kenya must find goods and services it can sell to the neighbouring countries to remain competitive.

Nairobi-based Jungle Macs is a 10-year old family business that exports macadamia, cashew and pea nuts – mainly to the US, Europe and Asia.

Organisers of the survey said the nuts firm stood out in nearly all the parameters of assessment – including revenue growth, return on investment and profits.

Synovate, the consumer market research firm that conducted the Top 100 SMEs survey, found that 74 per cent of the participants had annual turnovers of between Sh70 million and Sh400 million.

The SME sector employs close to 80 per cent of Kenya’s total formal sector workforce and accounts for about 20 per cent of the gross domestic product, according to the Kenya National Bureau of Statistics.

This year’s survey found that the majority of participating firms plan to enter the regional market as part of the growth strategy placing East Africa’s integration project at the centre of Kenya’s economy.

Most are looking for expansion opportunities in neighbouring countries with Uganda as the most favourite destination that has attracted the interest of 54 per cent of the firms.

Tanzania was second with 48 per cent, while Rwanda was third with 37 per cent.

With a combined population of about 130 million people, East Africa’s integration has continued to expand markets for enterprising citizens that most Kenyan firms are eyeing.

Josphat Mwaura, the chief executive of KPMG East Africa, urged the entrepreneurs to demand quality services from the government in light of the critical role that SMEs play in the economy.

This year’s winner, Jungle Macs, is the brainchild of Patrick Wainaina, a former manager at mobile telecoms firm Safaricom.

Mr Wainaina initially worked for a Japanese firm in the US before returning to Kenya in 2002 to set up the nut-processing firm using some Sh300,000 he had saved.

With that money, Mr Wainaina rented a go-down and bought an old boiler for Sh20,000 that he used to get the firm’s operation off the ground.

But as is common with most start-ups, the business soon ran into financial trouble forcing him in 2003 to seek employment at Safaricom, the mobile phone company that was then only three years old.

Safaricom hired him as a manager in charge of the roaming services and he in turn had to hire a manager for his young enterprise.

Mr Wainaina says he used part of his earnings at Safaricom to shore up his business, having failed to convince any bank to lend to him money.

In the past few years, Jungle Macs has posted an annual turnover of more than Sh600 million.

Mr Wainaina says the firm has been growing steadily in the past five years – defying even the 2008-2009 global economic crisis.
“Nuts have gained popularity in these markets because they are healthy snacks that carry no cholesterol – the raw fat that has been blamed for the rise in heart disease across the world,” he said.

Statistics from Kenya Nut Packers Association (KnutPAK) indicate that Kenya exports 3,750 tonnes of nuts every year.