The Promotional Mission to Kenya took place on 12-15 December.
The trip was under the aegis of PAIH and with the participation of President Tomasz Pisula and representative of BGK Mr. Jarosław Trwoga. The attendees to the Mission included representatives of PCOCE, Mr. Jan Mikołuszko, President of the Board of PCOCE, Andrzej Kozłowski, Vice-President of the Board of PCOCE, and Mr. Tomasz Poskrobko, Director of Export Department of Unibep SA.
The host Mr. Michael Mazurewicz, Director of the Trade Office /PAIH/ in Nairobi, prepared the programme and agendas of the individual meetings.
Why was Kenya the target of the Mission?
The President of PAIH answered this question in an extensive interview with the WNP.pl on 18 December. Please feel encouraged to read how he deals with the question.
We selected participants for the Mission in line with a large project called “Ndarugu Metropolis” we wanted to present. A consortium of five influential families decided to establish a Free Economic Zone in their areas, amounting to ca 250 ha, 35 km from Nairobi.
For each of the above-mentioned areas of activity, they are looking for partners by applying the principles of organising special purpose vehicles (SPVs) to build industrial, commercial, residential and hotel facilities in this area. ARUP is currently preparing a very general conceptual plan of the project. The planned cost of service infrastructure of this area is estimated by the Project Owner at USD 140 million.
A visit to the headquarters of KenInvest, the equivalent of the Polish PAIH, was another important meeting. We met with a very large group of decision makers responsible for particular segments of the construction market in Kenya: housing, social housing, industrial construction, infrastructure construction, as well as legal, administrative and tax departments.
The participation in the mission produced the following conclusions:
1. The PAIH office in Nairobi can, and is ready to, play an extremely important role in guiding company representatives along the official path of company registration and legalising their stay for business purposes. A group of local experts who are familiar with all applicable laws and the market can assist in the initial steps of those who decide to operate in Kenya.
2. Kenya is one of the most dynamically developing countries in Africa with a projected GDP growth of around 6%. As a result, it has a very extensive programme of infrastructure development, social housing and the expansion of its fairly modest industrial segment. During this short visit one statement came to mind, confirmed during the meeting in KenInvest, that the construction market is dominated by Chinese companies. This dominance is due to the entire investment process from the design stage, to materials and equipment, to the financing of the project. In Kenya, there are currently 137 companies with foreign capital, 80% of which belong to the Chinese capital.
3. Kenyan construction sites are very modestly equipped with equipment and technology, with cheap labour (average worker earnings is ca USD100) and many jobs done manually. The same applies to building materials. Virtually all materials have to be shipped to Kenya. Currently, the market is dominated by Chinese products.
This is a great opportunity for manufacturers and exporters, because the market expects a certain diversification, change in quality, a higher standard. The on-site lack of materials and new technologies means that an exporter must prepare both its staff and the market before selling its product.
To sum up: The Kenyan market is an open market, without strong competition, hungry for everything related to the investment process, from designs, especially in the agri-food industry, to all the infrastructure including green construction, which effectively does not exist here, to the financing of these projects. This is a great challenge, but an even greater opportunity for the Polish construction industry and for Polish institutions supporting export expansion. We hope that at least to some extent by reading this article you become interested in the Kenyan construction market. Having employed a consortium approach which would help distribute and reduce risks, setting up business there seems worthwhile.