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Cabinet gives parastatal new lease of life

CARTOON
By | December 2nd 2010

BY JOHN OYUKE

Kenya National Trading Corporation Limited formed in 1965 primarily to supply essential commodities will not be closed after all.

The Cabinet has rescinded the order it had given in May 2004 that the corporation be wound up after several years of loss making.

At a State House meeting, chaired by President Kibaki on Tuesday, the Cabinet instead approved the restructuring, revival and expansion of the mandate of the corporation.

Under the new plan, the KNTC will develop the retail and wholesale sector in the country in line with Vision 2030.

It will also promote and market produce from local, medium and small enterprises, and provide capacity for produce from cottage industries in the rural areas, to penetrate regional markets. The firm was the sole wholesaler and distributor of salt, sugar, cement, bicycles and other products. However, it lost this monopoly with the onset of liberalisation in the early 1990s.

In 2001, the corporation suffered losses amounting to Sh145 million but was able to break even in 2007 and posted Sh40 million profit in 2008.

The corporation currently has eight depots in the country, two in Nairobi while others are in Rift Valley and Western provinces.

Cement, nails, chain links, iron sheets and salt are the main products the corporation sells, although it intends to expand its cement business to ensure it gets healthier cash flow to enable it subsidise other products.

KNTC is also working on ways to help small and medium enterprises import raw materials into the country. It intends to buy them in bulk and sell to small businesses in reduced quantities.

The corporation also plans to open trading houses outside the country to help local small companies enter the export markets.

The Cabinet meeting also granted International status to Global e-Schools and Community Initiative in Nairobi, Kenya, and ratified the protocol on environment and natural resources management.

The Cabinet also ratified the instruments amending the constitution of the International Telecommunications Union and the Convention of the International Telecommunication Union (Geneva, 1992.)

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