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Nairobi(Kenya), Africa’s New Hq For Multinational Firms by gallivant: 10:39pm On Sep 04, 2011 |
[CENTER]Nairobi, Africa’s new HQ for multinational firms [/CENTER] [CENTER] Global firms are looking to make the city the fulcrum of their continent-wide operations as they race to be part of Africa’s growth story. [/CENTER] [B]Nairobi is fast becoming the African home of choice for multinational companies, especially those in the services sector, looking to grow their presence on the continent. [/B] [B]Pfizer, the US-based pharmaceutical company, PricewaterhouseCoopers, and Posterscope, an outdoor advertising firm, have in the past seven days unveiled plans to establish a regional hub, recruit staff and set up shop respectively in Kenya’s capital city last week.[/B] [B]In the past one year, global heavyweights in the service industry such as IBM, Google, PwC, advertising agency WPP, Bharti Airtel, Nokia/Siemens, Huawei, Procter & Gamble, Biersdoff, Barclays and Stanchart have announced plans to either set up regional hubs or transform their local operations to serve sub-Sahara Africa.[/B] [B]Several factors work to the benefit of Kenya and the other East African states too. [/COLOR][/SIZE][/B][B]First, the formation of a Common Market is helping create a strong internal market with a population of 130 million and a middle class estimated at 30 million consumer[/B]s. With South Sudan, which has a population of 8.4 million, expressing interest in joining the EAC, and Kenya opening up its northern frontier through the Lamu Corridor to serve Ethiopia, which has a population of 84 million, the region now boasts a potentially connected internal market of 240 million people. This is way above the 150 million mark that experts say a country or a bloc needs to be a major world power. [B]The second factor is the peace dividend that has come with the ending of most of the civil wars in the Great Lakes. This is making the region a safe bet to invest in. The peace dividend has seen homegrown African multinationals such as Ecobank, Stanbic, UBA, MTN, KCB and Equity pursuing a more aggressive expansion strategy in these markets, which are similar to their home markets. [/B]Global multinationals too, like Pfizer and IBM, are smelling opportunity in the region. Pfizer sells mostly antibiotics, cough syrups and anti-fungals. The drugs are finding a ready market as the East African population grows — at an estimated 3.5 per cent in 2011. “[B]The hub will serve as a legitimate supply system of products, bringing us closer to the market and reducing the total accumulated cost per product[/B],” said country director for Nigeria and the East Africa region Enrico Liggeri when launching Pfizer’s hub last week. [B]Kenya’s healthcare industry has attracted private equity investments that have helped some of the insurance service providers and hospitals expand.[/B] [B] In 2009, IBM opened an office in Nairobi to meet the increased demand from clients in both the private and public sector in East Africa and across the region.[/B] The clincher for IBM, which previously had little interest in sub-Saharan Africa, was winning a multimillion-dollar contract to manage Airtel’s IT infrastructure across 16 African markets. IBM is expected to hire 2,000 workers to serve its continental business. [B]Airtel too wants to have the hub of its African operations in Kenya and is currently planning to put up a headquarters in the city.[/B] Another factor that is acting in the region’s favour is the massive investment that EAC governments have put in to build fibre-optic cables, which has boosted Internet speeds and connection levels. Unlike in manufacturing – where cheap power, water and raw materials are key – the global services industry thrives on extensive and reliable airline connections, a comfortable but affordable location, fast Internet connections and a deep pool of skilled talent. [B]Operational centre[/B] [B]This is why international firms are looking to make Nairobi the fulcrum of their continent-wide operations as they race to be part of Africa’s growth story. One of the biggest pluses for Nairobi is its central location on the continent. This hugely favours the national carrier, Kenya Airways.[/B] [B]South African Airways, a key competitor, is disadvantaged by the longer distances it must fly to cover the rest of Africa. Indeed, KQ has a bold, if not overly ambitious, target of flying to every African capital city by 2013. If it hits this target, business executives will find it much easier to reach any part of the continent from Nairobi.[/B] This will mean better revenues for KQ because Africa remains its most lucrative market, where it enjoys healthy margins and little competition. It generated about half of its $953 million revenues in Africa in the financial year ended March 2011. [B]It also means that the majority of business executives traversing the continent will find their way back to Nairobi, the airline’s main hub. The airline’s expansion has already created a demand for scarce hotel rooms, which according to a report released by Mercer, a human-resource consulting firm, is among the highest in the world. The growing demand for accommodation and conference facilities has encouraged global hotel chains to set up in Nairobi to plug the supply deficit.[/B] Rezidor Hotel Group, owners of the Radission brand, are putting up a hotel in Nairobi, joining about 10 other local hotels coming up. [B]Investigations by The EastAfrican show at least 2,500 new bed capacity will be created in the next year in Nairobi alone.[/B] [B]Kenya is also stepping up its efforts to improve infrastructure, with the ongoing road works, which will make it easier to travel within the capital city. Other infrastructure projects supporting the business environment in Nairobi include the laying of infra-red cables allowing for faster Internet connectivity.[/B] The services industry needs fast Internet connectivity because it allows for Internet banking and easier communication such as web conferencing with the Western world. [B]Multinational firms like Google are also finding it easier to recruit in Nairobi where many say there is a deep and broad pool of talent from banking to technology.[/B] “[B]It seemed to be the easiest place to get the talent that we needed[/B],” said Joe Mucheru, Google “lead” for sub-Saharan Africa on why the technology company first set up in Kenya before spreading to other Sub-Saharan countries. Talent is a big concern for the multinationals and the existence of a strong mobile technology applications innovation hub that has produced products like M-Pesa and the various Google map based apps is working in Kenya’s favour. “[B]We are still way ahead — relative to the rest of sub-Saharan Africa — in terms of graduates being produced every year[/B],” said Gitau Githongo, a Nairobi based economist. “[B]This means that you will find good quality staff if you are setting up here.[/B]” However, not every Kenyan graduate is lucky enough to get a nice job immediately after graduating, and there is evidence that a good number of these potential employees are not well qualified and employers have to spend a lot of money retraining. The level of unemployment for mass unskilled labour remains as high as in other East African nations. TheEastAfrican |
Re: Nairobi(Kenya), Africa’s New Hq For Multinational Firms by gallivant: 10:44pm On Sep 04, 2011 |
Google sets up base in Sub-Saharan Africa Google favours Kenya over SA |
Re: Nairobi(Kenya), Africa’s New Hq For Multinational Firms by gallivant: 10:51pm On Sep 04, 2011 |
China Central Television (CCTV) to expand its Nairobi HQ, African offices |
Re: Nairobi(Kenya), Africa’s New Hq For Multinational Firms by gallivant: 10:54pm On Sep 04, 2011 |
[B]Nairobi selected for new Visa International Africa office[/B] |
Re: Nairobi(Kenya), Africa’s New Hq For Multinational Firms by gallivant: 10:58pm On Sep 04, 2011 |
[B]Coca Cola announces US$ 62million in Kenya[/B] |
Re: Nairobi(Kenya), Africa’s New Hq For Multinational Firms by gallivant: 2:35am On Sep 05, 2011 |
Intentions have been declared ''Giant of Africa'',behold the rise of the African Lion. |
Re: Nairobi(Kenya), Africa’s New Hq For Multinational Firms by ektbear: 5:32am On Sep 05, 2011 |
interesting |
Re: Nairobi(Kenya), Africa’s New Hq For Multinational Firms by gallivant: 7:44am On Sep 05, 2011 |
[B]Bharti Airtel board to meet in Nairobi[/B] |
Re: Nairobi(Kenya), Africa’s New Hq For Multinational Firms by PhysicsQED(m): 11:29pm On Sep 06, 2011 |
Re: Nairobi(Kenya), Africa’s New Hq For Multinational Firms by beglicigh(m): 12:37pm On Oct 13, 2011 |
Awesome share it is really. I have been waiting for this tips. |
Re: Nairobi(Kenya), Africa’s New Hq For Multinational Firms by pendo89(f): 1:25pm On Oct 13, 2011 |
AMEN Kenyaman where art thou. This is the kind of stuff you ought to be looking out for not hague page and wage. Have you been to gigiri. The HQ of UN? All vehicles plying that route bear the UN number. I think most of these multinationals are taking up offices at Sameer Park on mombasa road. beautiful beautiful park ,you never took pics of that. And am soo delighted!! BA Freighter will start operating this route from next week!! they have been serving passengers and cargo only when space allows but the perishable biz has made them reconsider.I think that was very good news to my ears.biz wise. Thank God they are expanding the airport cz av been seeing 'strange airlines' in this region. And then there's also an extension of wilson airport(serves NGOS') taking place. |
Re: Nairobi(Kenya), Africa’s New Hq For Multinational Firms by pendo89(f): 1:53pm On Oct 13, 2011 |
visa visa mmh, I think Mpesa was the best thing to ever happen in kenya.It has made every citizen a walking bank. lol Very convinient,fast,cheap. |
Re: Nairobi(Kenya), Africa’s New Hq For Multinational Firms by pendo89(f): 1:59pm On Oct 31, 2011 |
Nairobi’s tourism circuit attracts six top hotel investors Nairobi’s status as a conference and business travel hub has attracted six new top-end hotels, promising to add 800 beds to the circuit that has been grappling with limited capacity. Hemingways Collection, SAMCO Holdings, Simba Group, Rezidor Group of Hotels, and the Red Cross are some of the investors who are putting up new properties that would add at least 800 beds into the market. The new hotels are looking to cash in on the growth in the tourism that has led to an increased demand for bed capacity in the city, mainly driven by conference and business. “The demand is high in Nairobi,” said Mr Mike Macharia, the chief executive of Kenya Association of Hotel Keepers and Caterers. “The increased capacity is welcomed, especially in the three to five star qualities.” Investors in the sector are targeting conference and business travellers as well as leisure tourists who come into the country via Nairobi on their way to other tourist destinations. Nairobi has become a major hub in the region connected by international airlines. Multinationals have in the past couple of years shown interest in the city setting up offices in Nairobi, raising its profile as a major business destination. Business travel accounts for about 20 per cent of all arrivals in the country, second to leisure, which contributes 55 per cent. Kenya Tourist Board statistics show the number of visitors increased by 32 per cent to 549,083 in the first-half of the year. Earnings grew by 32 per cent during this period to Sh40.5 billion. This year is expected to be the best for the sector despite the current security fears that has seen an international conference cancelled. The new facilities are expected to increase competition in the market, even though players say there is enough demand to sustain the new properties. The current occupancy hotel rate in the city ranges between 60 and 80 per cent, said Mr Macharia. “Nairobi still has room for more.” The EKA Hotels, by SAMCO Holdings, will put into the market 170 rooms in February 2012 and four conference rooms. The property, which is betting on its location on Mombasa Road to attract business, seeks to tap local conference market and business travellers. “Demand is increasing as the city grows,” he told the Business Daily at the hotel’s construction site. The Belgium based Rezidor Hotel Group is expected to open the five star Radisson Blu in Upper Hill early 2013, according to its website. The hotel, which is owned by Elgon Road Development, will put in the market about 240 rooms. Rezidor this year signed an agreement with AMS Hotels to build a 126-bed boutique hotel in Westlands. The Park Inn by Raddison is expected to open its doors towards the end of 2013. “Our business is managing hotels. In line with our strategy over the past 10 years, we have completely divested ourselves of real estate and own no properties,” said Mr Andrew McLachlan, the Rezidor’s business development vice president for Africa and Indian Ocean Islands, earlier in the year. Hemingways Collection, whose property in Karen is expected to open in August next year, and will add 45 luxury suites in the market. The company, which owns other luxury properties across the country, is looking to add the city unit to its circuit. Stream of income In 2008, the Red Cross opened up Red Court Hotel to boost its stream of income and is looking at opening a second unit, The Boma, in the next few of months. The property will have 148 beds. Simba Group, which is expanding its business into the hospitality industry, is set to invest no less than Sh2 billion in a five-star flagship property of about 200 rooms. The hotel, on Chiromo Road, is expected to open in the first quarter of next year. Currently, the key players in the city’s hotel industry are Intercontinental Hotel, Fairmont Norfolk Hotel, Nairobi Serena Hotel, Hilton Hotel, Safari Park Hotel, Windsor, Laico Regency, Sarova Stanley, Holiday Inn, Nairobi Safari Club, Sarova Panafric and Panari Hotel. With the newer ones: Tribe, Sankara, Ole Sereni, and Crowne Plaza already recording growth in business. |
Re: Nairobi(Kenya), Africa’s New Hq For Multinational Firms by pendo89(f): 2:01pm On Oct 31, 2011 |
Indian tycoon tightens grip on Kenya’s real estate market Indian tycoon Mukesh Ambani is deepening his foray into Kenya’s real estate market with a series of office and residential property developments that have already earned him an estimated Sh2.5 billion in profits, barely three years after his first investment in the country. Mr Ambani, through Delta Corporation East Africa – a local subsidiary of his Indian conglomerate Reliance Industries – is currently constructing multi-billion shilling office towers in Nairobi’s Upper Hill and Westlands areas. Delta Corporation East Africa is also developing a multi-million shilling residential estate in Athi River. The 53-year old Indian business tycoon is believed to have pocketed Sh2.5 billion from two recent property deals, one of which was last month’s sale of Delta Centre to the World Bank. Forbes Magazine has listed Mr Ambani as the world’s ninth wealthiest person with a personal fortune of $27 billion. The multi-storied office tower that Mr Ambani sold to the World Bank is located in Nairobi’s Upper Hill area and is estimated to have cost Delta East Africa Sh960 million to develop, returning a profit of Sh1.24 billion after it was sold to the World Bank for Sh2.2 billion. Ongoing sale of the Sh550 million Delta Plains estate in Athi River — comprising 153 residential units is estimated to have fetched Mr Ambani’s companies Sh548.8 million. He has so far sold houses worth a total of Sh1.2 billion with each unit selling at a price of Sh8 million. Multiple sources familiar with Delta East Africa’s plans say the Indian billionaire is betting big on Kenya’s real estate, and has projects worth an estimated Sh3.4 billion in the pipeline. Teams Management Services (TMS), another wholly owned subsidiary of the Reliance Industries, is leading the design and construction of the multiple development projects, which have positioned the Ambani business empire to becoming a leading player in Nairobi’s real estate space. “Real estate in East Africa has been identified as an emerging opportunity with immense potential by the Company,” reads a statement on Delta’s website. “To tap this opportunity, the Company has entered into a 40:60 Joint Venture, Delta Corp East Africa Limited (DCEAL) with a wholly owned subsidiary of Reliance Industries Limited.” It read further. Mr Ambani is the chairman and managing director of Reliance Industries, a family business that has grown to be India’s biggest private company and is also listed in Fortune 500. He is the eldest son of Dhirubhai Ambani, the late founder of Reliance Industries. Other Indian multinationals including Tata Group, Essar, Bharti Airtel and AMS Properties have also made major inroads into Kenya in the recent past, placing them amongst the biggest gainers of the decade-long boom in the country’s economy. Backed with their resource-rich parent companies back home, their foray into nearly all critical sectors of the Kenyan economy has been rewarding, at least going by their planned investments. Share This Story 5Share Tata Group has said it is scouting for investment opportunities in geothermal electricity generation in Naivasha, perhaps to benefit from the perennial shortage of energy in the country as supply continues to lag demand in the ever-rising need for energy to power the expanding economy. Michael Odera, the chief executive of Tata Chemicals Magadi - the firm that extracts soda ash from Lake Magadi – recently told the Business Daily that he has been tasked with evaluating the geothermal potential in the Rift Valley to inform the multi-billion investment in about five years. Tata Chemicals will commission its newly installed Sh10 billion soda ash purification plant in Magadi early next month, expected to double the firm’s output to 700,000 metric tonnes per year. “We are now moving to Ol karia in Naivasha where the geothermal wells are thought to have the desired potential,” he added. |
Re: Nairobi(Kenya), Africa’s New Hq For Multinational Firms by paniki(m): 5:48pm On Oct 31, 2011 |
It would be much better if the headline read: KENYAN tycoon tightens grip on Kenya’s real estate market |
Re: Nairobi(Kenya), Africa’s New Hq For Multinational Firms by pendo89(f): 7:28pm On Oct 31, 2011 |
Yeah.But hes a big investor.Whatever he does will benefit the citizens. At the end of the day its not who puts bread on my table but the fact that there's bread to put on the table, |
Re: Nairobi(Kenya), Africa’s New Hq For Multinational Firms by MorrisaMkenya(m): 2:48pm On Aug 13, 2014 |
gallivant: Intentions have been declared ''Giant of Africa'',behold the rise of the African Lion.Kenya!Kenya!Home!! |
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