- German-based manufacturing company Stihl Group has announced plans to open a new subsidiary dubbed Stihl East Africa in Nairobi, Kenya, by the end of August 2022
- This will make Kenya the first East African hub for the manufacturing company and the second African country after South Africa, where the company established a subsidiary in 1996
- Stihl said it intends to distribute its agricultural and construction equipment to the East African countries, which include Tanzania, Uganda, Burundi, Rwanda, South Sudan, Ethiopia, and Somalia, through Kenya
Stihl Group, a German-based manufacturing company, has announced plans to open a new subsidiary dubbed Stihl East Africa in Nairobi, Kenya, by the end of August 2022.
This will make Kenya the first East African hub for the manufacturing company and the second African country after South Africa, where the company established a subsidiary in 1996.
Stihl said it intends to distribute its agricultural and construction equipment to the East African countries, which include Tanzania, Uganda, Burundi, Rwanda, South Sudan, Ethiopia, and Somalia, through Kenya.
This presents the best investment opportunity mainly driven by several factors, including rapid infrastructure developments, particularly in the transport sector, which enhances the transport of goods in and out of the country.
Some of the recently concluded projects include the Nairobi Expressway and berth one of the LAPPSET Corridor, among many others. Some of the ongoing projects include the Metre Guage Railway, Western Bypass, which is nearing completion, and the Nadapal River Section A1 road project, among many others.
The investment opportunity is also driven by the considerable contribution of the agriculture and construction sectors to the Kenyan economy, accounting for 23.3 per cent and 7.3 per cent, respectively to Kenya’s GDP in the first quarter of 2022.
According to experts from Cytonn Investments, this is expected to benefit Stihl’s agricultural and construction manufacturing businesses.
The investment opportunity is also driven by the continuous recognition of Nairobi, Kenya, as a regional hub, thus boosting investor confidence in the country and attracting numerous foreign investments and developments.
It is also influenced by rapid urbanisation and population growth rates currently at 4 per cent per annum and 2.2 per cent per annum, respectively, against the global average of 1.8 per cent per annum and 1 per cent, respectively, as of 2021, thus driving demand for goods and services.
An analysis by Cytonn noted that Kenya’s industrial sector continues to experience rapid growth, evidenced by the various expansion and construction activities that have occurred in the sector.
This includes Grit Real Estate Income Group, which completed the purchase of Orbit Products Africa, a warehouse and manufacturing facility located in Machakos County, at the cost of KSh 6.1 bn in March 2022.
It also includes Purple Dot International Limited, which announced plans to develop a warehousing hub worth KSh 600 million at the Harvest Industrial Park in Athi River.
In May 2022, Purple Dot International Limited launched the construction of a KSh 2.5 billion mixed-use commercial project along Mombasa Road dubbed Purple Tower.
The 14-floor project will sit on a 1.15-acre piece of land along Mombasa Road and will comprise office and retail spaces. The first three floors will be for retail spaces while the remaining floor spaces will comprise offices. This comes a week after the development firm announced plans to develop a warehousing hub worth KSh 600.0 million at the Harvest Industrial Park in Athi River, Machakos County, a sign of its increasing appetite for the Kenyan property market.
“We expect the trend to continue shaping the sector’s performance owing primarily to the rapid infrastructure developments, coupled with the increasing investor confidence in Kenya’s property market, which drives local and international investments.”
In a related story, Local Authorities Pension Fund (LAPF) Kenya has announced plans to construct a mixed-use facility at an estimated cost of KSh 10.0 billion ($83 million) in Nakuru County.
The Exchange Africa recently reported that the mixed-use facility would comprise a shopping mall, five-star hotel, warehouse block, residential apartments, kindergarten, petrol station, and amusement park.
The facility’s construction, which will be done in phases for an undisclosed period, will add to the pension administrator’s investment assets, currently over KSh 51.6 billion.
Other Real Estate properties by LAPF include the Maksembo affordable housing project consisting of 1,870 units in Kisumu County, near Kisumu International Airport and Moi Stadium.
LAPF’s decision to invest in Nakuru County is mainly driven by several factors, including rapid economic growth in the area following its upgrade into a city by President Uhuru Kenyatta in December 2021.