The firm is looking at investing Sh300 million ($3 million) in Uganda and Sh150 million ($1.5 million) in Tanzania to meet the growing product demand.
The manufacturer in its 2017 annual report disclosed that the Uganda and Tanzania subsidiaries incurred a loss of Sh1.8 million and Sh77 million respectively, during the year ended December 31, 2017.
Listed Crown Paints is set to invest Sh450 million in its Uganda and Tanzania subsidiaries.
Group chief executive Rakesh Rao says the firm is looking at investing Sh300 million ($3 million) in Uganda and Sh150 million ($1.5 million) in Tanzania to meet the growing product demand.
Mr Rao expects political stability in the region will attract investors in the construction and infrastructure projects.
“The Kenyan government has indicated interest in providing one million low-cost houses and we expect that this will create a significant demand for paint,” said Mr Rao.
The manufacturer in its 2017 annual report disclosed that the Uganda and Tanzania subsidiaries incurred a loss of Sh1.8 million and Sh77 million respectively, during the year ended December 31, 2017.
In Tanzania, the loss was attributed to change in government policies. “The Tanzania market being largely an economy market, profitability remains under pressure due to cut throat competition,” said the firm while Uganda market has recovered slightly from 2016.
In 2017, Crown paints invested Sh832.5 million in its regional subsidiaries, largely by turning debt owed by the fully owned loss-making units into equity.
The move was expected to ease pressure on the technically insolvent subsidiaries. In 2016, the firm had raised its investment in the units in Kenya, Uganda and Tanzania to Sh881 million from Sh48.5 million in 2015.
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