Using technology to reap from international markets

By MACHARIA KAMAU

Technology is key for the survival of any company around the world today. Computers and the Internet have increased access to information and allowed companies to reach new customers.

Sophisticated new tools help process business activities more efficiently, boosting productivity.

But for most micro, small and medium-sized companies in developing regions, access to technology has been limited.

Analysts say this is what has been undermining their performance and preventing new businesses from being created.

Indeed, this is what one of the country’s leading manufacturer of soft drinks is banking on as it seeks to spread its operations across Africa, United States and Africa.

The firm has already laid an elaborate plan that will see it expand its operations outside its tradiitonal territories-the East African countries.

The ambitious plan is poised to cost Kevian Kenya Limited, the manufacturer of Pick and Peel, Mt Kenyan water and Afia juice billions of money, with key target markets being outside Africa. The bid follows its successful penetration in the five East African Community (EAC) partner states.

Kevian, one of the firms that won the Top 100 Company awards last year intends to bolster its operations by venturing outside East Africa. PHOTO: FILE/STANDARD]

It is not clear if the firm will be expanding organically or through acquisitions but indications are high that its financial muscles could see it go organic.

According to the firm’s Managing Director Richard Kimani, the response of its products in the market has been tremendous, attributing it to the strict policy of brewing the juices ‘naturally’ from fresh fruits.

"Our juices have 100 per cent nutrients, making it very appealing to the growing market that is health conscious. Our mission is to be the leading producer and marketer of branded fruit juices in the continent," he said, adding: "Our products are renowned for their superior quality and unmatched taste. It is for this reason that last year, we were recognised as one of the top 100 companies in the region."

Today, the regional juice market is worth $1.7 billion, soft drink market $3.5 billion with energy drinks making another $1 billion and packaged water $992 million.

In Kenya alone, the national juice market estimated to be worth Sh7.2 billion. In the fresh drinks market, a huge demographic of people under 35 years make up about 80 per cent of the East Africa’s population.

With a number of players already in the fresh juice market, Kevian’s strict policy on quality has apparently given it a competitive advantage, making it command a better share of the market in the EAC partner states.

QUALITY MATERIALS

To ensure a constant supply of raw materials, in this case fresh fruits from farmers, the firm in partnership with GTZ, Horticultural Crops Development Authority (HCDA) and the Ministry of Agriculture are offering farmers with extension services, a move that has impacted positively on fruits production.

This has been corroborated by provision of farm input subsidies. "These projects have empowered our farmers, making them to earn a living. This has boosted their morale, and on our part it has ensured that we have quality raw materials supplied without a hitch," he said.

But even with the rosy outlook, the entrepreneur who won the Moran awards recently is sounding an alarm over the rise in counterfeiting of products in the market.

Mr Kimani says the menace is hurting an otherwise profitable sector as illegal traders counterfeit products.

"This has been the key challenge in the sector. The actors recycle our used bottles, making it almost similar to ours in terms of physical appearance," he said.

To differentiate between genuine and imitated products, Mr Kimani says the counterfeited ones have seals, which are not found in the genuine ones.

More so, juices in the genuine bottles are normally full unlike the copied ones. To avoid the trap of these conmen, consumers are advised to totally destroy used bottles.

"The Government should also step up its war, which has been on for sometime now, against these illegal businesses. This will enhance the growth of the sector whose potential is huge." Market analysts say for the country to realise its full potential in fruits processing, the Government must develop food business.

"It must also come up with concrete plans on building up infrastructural facilities by providing and improving such facilities as water, electric power, sewerage and sanitation, telecommunication facilities and roads," Mr Kimani said.

More important in a bid to make the sector competitive, research activities enhanced and conducive financial and regulatory policies developed.

Kevian move to look West for opportunities is likely to impact significantly on its revenues as it seeks to outmuscle perennial juice makers in the region. The United States’ food market, for example, is one of the largest sectors, accounting for more than 10 per cent of all manufacturing shipments. In addition, the processed food industry in the country has experienced fairly steady growth over the last decade though it experienced a slight decline from 2005 to 2006.