Machinery firm turns to leasing

Principal secretary state department of Public Works, Housing and Infrastructure, Prof Paul Maringa [right] in Mombasa on January 17, 2018. [Omondi Onyango, Standard]

Heavy machinery manufacturer XCMG says it is targeting infrastructure works in counties as it looks to grow market share.

The Chinese company revealed at the weekend it will embrace a leasing model where contractors can also acquire the equipment permanently by making tailored payments over a given period.

This was in reaction to a plea from Public Works Principal Secretary Paul Maringa for the company to develop a leasing model that would further lower the cost of construction in the country.

“The less our contractors rely on hired equipment, the more they are capable of lowering the cost of business and ultimately overall project costs. Already, the Government has adopted the leasing model for motor vehicles,” said the PS (pictured).

I believe it is possible to take a leaf from the Government motor vehicle leasing model and create a new system of leasing that will assist construction start-ups, especially those owned by our youth to thrive." He spoke in Nairobi when XCMG hosted an open day for contractors, engineers and other building professionals as well as bureaucrats to showcase its products.

Operating leases is gaining traction in the country, with the Government setting pace by recently opting to lease vehicles for the National Police Service. County governments are expected to follow suit alongside other nascent sectors such as oil and gas, mining, energy and agriculture.

XCGM General Manager for Machine Sales Emmanuel Masika said the leasing business provides the firm with an opportunity to diversify its income streams.

“Partnership between banks and us can be mutually beneficial and help the two organisations exploit existing synergies,” he said.