Kenya attracts major American Investors despite decelerating economy

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Kenya has seen five American multinational corporations enter its territory setting base in what is a challenging time for the East African economic hub.

The latest entrants who entered the Kenyan market in the last 12 months are an indication that US private-sector businesses are bold enough to dive into the economy that has been decelerating.

Among these companies that will create opportunities and transform the business landscape in Kenya and the region include Cigna, an American health services organization and Abbot Laboratories.

The two have already set up regional offices in Nairobi. This is Abbot Labs’ second regional office in Africa after decades of being present in South Africa.

American agricultural chemical and seed company Corteva and the American Tower Corporation (ATC) have also set up regional offices in Kenya.

ATC has already acquired 723 towers from Telkom with another acquisition in the pipeline which will make ATC Kenya the biggest private tower operator second only to Safaricom.

Emerging Capital Partners (ECP) is the fifth American investment company and one of the largest private equity investment firms in the world to invest in Kenya. The company invested about US$34 million to acquire a majority stake in ArtCaffe.

This surge of investment occurred on the back of plans for the American Chamber of Commerce (AmCham) Kenya Annual Business Summit 2019.

Hub and gateway into the region

The AmCham Business Summit, to be held on November 4 – 5, 2019 is held in partnership with the Kenya and US government as well as the US Chamber of Commerce.

It serves as an engagement platform for the US and Kenya to find ways to increase two-way, trade and investment for mutual prosperity.

The 2019 edition of the Summit anchored on Kenya as the business hub and gateway into the region, will have an East Africa perspective, with participation expected from Tanzania, Rwanda, Uganda and Ethiopia in addition to Kenya and the US

Speaking at a media briefing on the AmCham Summit at the Intercontinental Hotel in Nairobi, the AmCham Kenya CEO, Maxwell Okello explained, “The East Africa perspective in this year’s Summit is based on growing interest in the region as a single market.”

The programme will feature doing business in-country forums, in addition to in depth sector forums on manufacturing, agribusiness, infrastructure, energy, health and the digital economy.

Okello further highlighted the importance of American and local private sector commercial engagement in driving growth and prosperity in the region.

“This year’s Summit provides a platform for direct business to business engagement enabling partnerships to develop and transactions to take place, expanding markets and catalysing business growth which is the key to job creation and economic prosperity,” he added.

Local business also stand to benefit from the Summit as it will give them the opportunity to meet various American companies, get to learn about opportunities and establish the right partnerships to advance their business goals.

Bi-lateral trade grossing over US$1 billion

Over the same period, other American companies that have been operating in Kenya have also increased their investments.

They include Microsoft who in May 2019 launched one of two, Africa Development Centres in Nairobi. The company has invested up to US$100 million in both centres and is looking to increase engineers across both centres to 500 by 2023.

In July 2019, Del monte announced investment worth US$5.8 million in a new state of the art packing facility that will expand its productivity as well as increase export capacity, creating 200 more jobs over.

Del Monte Kenya is one of the largest American employers in Kenya with a direct workforce of 7,000 and an additional 28,000 local jobs created indirectly by its operations.  Del Monte is also one of Kenya’s top exporters.

Similarly, Mars Wrigley Confectionery Inc., opened a US$70 million manufacturing plant in Machakos County in April 2019 poised to create an additional 200 jobs.

In 2018 Coca-Cola Beverages Africa unveiled a US$70 million hot fill processing line at its Embakasi plant in Nairobi to serve the region that is set to enhance significantly the local sourcing of the materials used in the production of their beverages.

The Coca – Cola system in Kenya alone supported 40,900 jobs in 2018. This includes the System’s own 4,100 own employees, 12,700 jobs supported among its local suppliers and their suppliers and another 24,100 jobs supported among the System’s distribution and trade partners, and their suppliers.

Kenya and the United States have over 50 years of partnership with current bi-lateral trade grossing over US$1 billion.

More US companies to enter Kenya

Even more US companies are looking to enter Kenya.

Currently Alternet Systems (ALYI) are planning to build Africa’s first electrical motorcycle plant under the ReVolt brand in Kenya. The deal, currently at industrial plant approval stage, when approved, will set the stage for the plant to assemble motorcycles in Kenya for sale across Africa.

“American companies see the potential of the economies of East Africa,” said Emily Waita, Public Affairs & Government Relations Leader for Coca-Cola Central, East and West Africa Ltd also speaking at the press briefing.

“With a growing population, a young talented workforce and a growing middle class, the region presents numerous opportunities for investment and growth which we are keen to partner on, to realize the economic transformation we know is possible,” she added.

In 2018, over 500 delegates representing a mix of 140 US and Kenyan companies participated in the AmCham Summit. In attendance were also 70 US government representatives and business leaders including members of the President’s Advisory Council on Doing Business in Africa (PAC-DBIA) who were visiting Kenya on a fact-finding mission.

Commercial deals worth US$100 million were signed during the Summit witnessed by President Uhuru Kenyatta and the former Under Secretary of Commerce for International Trade, US Department of Commerce, Gilbert Kaplan.

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