Multinational firms scramble for Nakuru County

Yusuf Hassanali Director Royal Group speaking during the official opening of Prism Towers
NAKURU, KENYA: A habitual traveler using the Nakuru-Eldoret highway will notice changes along the route and especially around Salgaa area where local and multinational companies are setting up their base.

Vast level fields which were previously maize and wheat plantations have been transformed into a set of multibillion industries, a few already in operation while a handful others are under construction.

According to various investors interviewed, the location, land availability and development patterns are among the factors that have attracted them to Salgaa.

Tapping into the potential of the area includes Royal Group Industries which last year invested Sh800 million on a steel factory whose construction is on course on a 22 acre piece of land.

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The company’s director Yusuf Hassanali said the project is set to be completed before the end of the year targeting the Rift Valley and Western Kenya regions.

“We started the construction last year and we hope to have it running before September. We chose Salgaa for the steel plant since majority of other steel factories are domiciled in Nairobi and Mombasa,” said Hassanali.

According to him, majority of the construction projects are taking place in the Rift and Western regions and its strategic location will cut down the cost of the materials by bringing them closer to the developers.

“Transportation of steel is costly and this skyrockets the construction cost to far-flung areas. Nakuru is a central point from Kisumu, Eldoret, Nyeri and Nairobi. Traders and contractors will be able to pay less for the same material,” said Hassanali.

The factory which will be producing steel bars of between 8 and 32 millimeters thickness will engage at least 300 employees at the plant and thousands others in the supply chain.

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The project adds to the company’s multimillion factory producing the competitive Royal tanks and pipes also in Nakuru which according to the line General Manager Tom Oyier has been flourishing.

“There are many development projects ongoing in Western and Rift Valley which have been providing a market for our plastic products. We noticed the hustle by the contractors in getting steel from far, a gap which our steel milling plant seeks to address,” said Oyier.

Also riding on the demand for construction materials is the National Cement Company which is setting up a cement plant in the area.

The company controls over twenty percent of the cement market locally with its Simba Cement brand. It has also made a name to itself in the East African region through exports.

Nakuru town is poised to attain city status in April this year and has been selected to pilot the Jubilee government’s housing agenda.

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With the county experiencing a fast growing urban population, the company which is a subsidiary of Devki Group is banking on the upcoming housing and infrastructural projects in the county and in other regions.

The cement plant is sandwiched between Royal Industries Group’s steel factory and an operating paper plant owned Megapack Kenya Limited.

The Megapack factory which has been in operation for the past few years produces corrugated cartons and various papers used in packaging of different products. Among its clients are firms dealing with textiles, footwear, floriculture, dairy, tea and beverages, food and confectioneries, and printing.

In 2015, the company emerged among the top 100 mid-sized companies as the fastest growing corrugated cartons factory in the country and received an award from Klynveld Peat Marwick Goerdeler (KPMG), an international accounting firm.

Sameer Agriculture and Livestock Limited has also pumped into the area Sh3 billion in its newest factory a few kilometers from Salgaa trading center.

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Rajesh Mishra, the company's national sales manager said that the factory which started its operations last year is gradually picking up with its various products already in the market.

“Currently we are producing three milk variants; full cream, whole milk and low fat milk and different juices. The plant is using the state of the art aseptic technology making it one of the most modernized facility in Africa,” said Rajesh.

Apart from providing employment to hundreds of youths, the plant has provided a market for milk from local dairy farmers who are yet to meet its demand.

“The production at the facility is still low due to low milk supply from local farmers. We are however working towards increasing the supply from new areas that we are yet to set foot,” said Njiri.

Also located in the area is Ganglong International, a Chinese company that majors in roofing materials but also deals with doors and tiles.

Among the variety of products made here include curved, galvanized, transparent, decra and versatile iron sheets. It also produces ridges, gutters.

The uniqueness of this factory from others dealing with similar products is the opportunity given to all clients to specify features such as size, colour and design of what they need depending on the nature of their construction projects at factory prices.

The area also hosts a number of poles treatment plants and flower farms which offer enormous employment opportunities to the residents.

Kenya Association of Manufacturers (KAM) South Rift Chairman Jayen Dodhia described the entry of the factories as a pointer to Nakuru becoming the second most preferred investment destination in the country after Nairobi.

“The county hosted an international investment conference during which investors expressed their confidence to set up their base in various parts of Nakuru. Salgaa provides a convenient location for logistics and enough space which are attracting the investors,” said Dodhia.

Dodhia added that the upcoming factories have an opportunity to shine and succeed if they produce products of unmatched quality to beat competition from plants based in other cities.

To the Salgaa business community, the entry of the industries to the area is a boost to their economy which majorly depends on it being a major stopover along the transit route and flower farms.

According to the community’s secretary Andrew Koros, changes at the town which had for many years refused to grow are being seen.

“It is our hope that the factories will absorb the many jobless youths from this area. People have started investing in residential houses which are mushrooming every day as developers’ bank on the anticipated population growth and demand for better housing,” said Koros.

Apart from the strategic location of the town, Koros attributed the dash for space by the companies on land availability which favours the construction of mega projects without worry for space.

With the population concentrated at the precincts of the small town, vast pieces of land under agriculture are still available for new entrants into the area.

Emmanuel Rotich, a local businessman added that the community is also embracing the companies with hope to enjoy benefits from them though corporate social responsibility programmes.

“For many years Salgaa has been known for its notorious back spots that have claimed hundreds of lives through road carnage. It also had a bad reputation due to prostitution. With the expected economic empowerment we are looking forward to great change among the people,” added Rotich.

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Nakuru CountyRoyal Group IndustriesSimba Cement