Manufacturing in Kenya // Top 7 Companies Influencing the Future

Manufacturing in Kenya // Top 7 Companies Influencing the Future

The manufacturing sector, worldwide, has played an important role in driving economic development. In fact, few countries have managed to develop without the manufacturing sector playing a leading role in sustaining economic growth, development, job creation, and alleviating poverty.

Manufacturing in Kenya contribution to the economy has stagnated at around 10% of the Gross Domestic Product (GDP). This is according to the Kenya Association of Manufacturers (KAM) report on Manufacturing in Kenya Under the ‘Big 4 Agenda (2018). However, there has been renewed interest in the manufacturing sector because of the Government’s Big 4 Agenda which seeks to increase the GDP contribution of the sector to 15% by 2022. 

Aside from the Big 4 Agenda, the Kenyan government is working towards being in stride with the 4th industrial revolution.  The revolution, perceived as the future of manufacturing, is driven by the ongoing automation of traditional manufacturing, industrial practices, and using modern smart technology.

Earlier in the month, Kenya was ranked at position 115 out of 152 in the latest Competitive Industrial Performance Index Report (2020), which benchmarks the ability of countries to produce and export manufactured goods competitively. The country was ranked lower than Egypt (64) and South Africa (52) but led East African counterparts with Tanzania (123) and Uganda (128).

There are over 1,000 companies in the manufacturing sector in Kenya. These companies are tasked to ensure they stay ahead of the global competition by becoming more innovative, and forward thinking.

The future of manufacturing in Kenya will be highly driven by technologies such as Artificial Intelligence (AI), Advanced Robotics, and Internet of Things (IoT). Other elements that will contribute highly on this, are the quest to fight climate change and affordable housing.

Here are some leading companies that are changing the narrative in the manufacturing sector as they take advantage of East Africa’s immense, and growing opportunities:

Unilever

In one way or another, you have probably used their product either for Nutrition Value or even for hygiene purposes. 

Unilever is one of the largest manufacturing companies in the World. As a result of it having a big platform, each day over 2.5 billion people consume products manufactured by Unilever. Moreover, Unilever sells over 400 brands all over the world. Some of its products which are performing very well in the Kenyan market include Blueband, Lifebuoy, Vaseline to mention a few.

However, what you might not know is, while the manufacturing sector has been a key contributor to climate change through carbon emission, and plastic waste, Unilever has gone big in the decent past to partner with local companies such as Mr Green to help in recycling of plastics.

In June, Unilever took a step towards changing the narrative and joined other companies in the climate change fight. They have since availed a range of ambitious new commitments and actions to fight climate change, protect and regenerate nature, and preserve resources for future generations.

14 Trees Kenya Limited

According to IFC, African cities become the new home to over 40,000 people every day, many of whom find themselves without a roof over their heads. In Kenya alone, the housing shortage is estimated at 2 million units. While acquiring land and developing land in Nairobi can take a toll on your savings and next to impossible, that doesn’t mean you cannot afford to build an affordable home.

One company is seeking to change this narrative, by accelerating the provision of affordable housing in Africa. The company known as 14 Trees is based in our Karen office space, and aims to accelerate and scale up the production and commercialisation of Durabric bricks. 

DURABRIC is an environmentally-friendly, affordable alternative to the clay burnt bricks widely used across sub-Saharan Africa, and other innovative green building solutions. It is also a low-carbon alternative construction solution that helps address the rapid deforestation faced by many developing countries, caused using burnt bricks as the main building material. 

DST East Africa

DST East Africa is a subsidiary to the Swedish company Seibu Giken DST.  The company offers a complete line of desiccant dehumidifiers that are some of the best on the market today. 

With experience and know-how in almost every humidity control application, their products allow them to supply and service all industries and consumers. 

The company based at our Spring Valley location provides exceptionally well-engineered, environmentally responsible products of superior quality within the Eastern African Market.

The company offers a standard range of desiccant dehumidifiers and bespoke dehumidification systems that are specifically designed to solve most humidity problems within the industrial and commercial sectors.

“Big Four is not a project as many may think. The “Big Four” is an economic development strategy or framework, which I have used to organize government delivery and to answer the question ‘WHY’ in terms of the selection of the priority areas we are working on.” President Uhuru Kenyatta speaking at the 7th State of the Nation Address on 12th November 2020.

1516 Spices

As the name suggests, 1516 Spices is a company in the agro-processing sub-sector of the manufacturing sector.  They process spices such as garlic,  turmeric, chillies which are  sourced from farmers in marginalized areas of the country. 

The company, based at our co-working space in Karen, has been able to source the raw materials from over 100 farmers. It then locally processes the materials, sells the end products in both local, and international markets. 

The end game is to support these farmers to educate their children through the proceedings they get from selling the products. They also help the farmers get quick and reliable access to the market.

BIDCO Africa

BIDCO Africa is one of the top manufacturing companies in Kenya producing fast-moving consumer goods. This manufacturing company was started in 1985 as a soap plant. Bidco Africa has since grown steadily over the past 30 years to become home to some of East Africa’s most loved household brands. Its footprint spans across Tanzania, Madagascar, Uganda and Kenya, with aspirations to expand to other parts of Africa.

With over 50 brands on the shelves of our supermarkets and shops, it is hard not to be currently consuming a BIDCO product. Unlike many companies in Kenya and in the manufacturing sector, BIDCO has also been in the forefront to embrace technology with the company currently embracing platforms such as  SAP HANA to help in seamlessly integrating their systems to enable them to make accurate business decisions quickly and at scale. 

The company has also worked with other tech giants in the country like IBM in the quest to leverage tech and remain at the forefront of competition

GearBox

Nairobi is nicknamed ‘Silicon Savannah’ for its many software startups. Gearbox is hoping to spark a wave of hardware-focused companies, so more Kenyan entrepreneurs can design products entirely in the country.

Being among the companies that are at the forefront of driving innovation, Gearbox is proving to be vibrant while adding value into the 4th industrial revolution.

Though with a different business model from what we are used to; manufacturing of products, Gearbox runs as an initiative that aims at improving the ecosystem for hardware entrepreneurship by providing flexible working space, shared prototyping facilities, training in manufacturing, fabrication and design as well as mentorship, investment opportunities and community development.

Through Gearbox, clever solutions have been developed including solar-powered irrigation systems, water-saving gadgets and an engine device called a “speed governor” used on Nairobi buses to keep them from going too fast. 

Another interesting prototype from Gearbox is the Sign-IO, a set of high-tech gloves that convert sign language into audio. Sensors attached to the gloves interpret hand movements into speech via an app.

East Africa Breweries Limited (EABL)

East African Breweries Ltd (EABL) is East Africa’s largest alcohol beverage company. In July 2016, EABL recorded a 7% profit growth for the financial year ending 30 June 2016, at KES 10.3 billion compared with KES 9.5 billion in the previous financial period. The largest shareholder of EABL is

Diageo Plc. EABL’s primary listing is on the Nairobi Securities Exchange (NSE), and it is cross-listed on the Uganda Securities Exchange (USE) and the Dar es Salaam Stock Exchange (DSE). In terms of ownership, the majority is held by Diageo & Associate Companies (50.03%) then others via NSE, USE and DSE (49.97%). 

EABL has over five Member companies that include Kenya Breweries Ltd (in 2019 Safaricom has partnered with KBL to help KBL leverage on IoT Tech)., Central Glass Industries Ltd, Uganda Breweries Limited (UBL), United Distillers Vintners (UDV) Kenya Ltd, East African Maltings Ltd (EAML), EABL International Ltd (EABLi), Serengeti Breweries Ltd, and East African Beverages South Sudan Ltd.

EABL has also been in the forefront of embracing technology that has helped the company attain sustainable competitive advantage through the prolonged benefit of implementing some unique value-creating strategies based on a unique combination of internal organizational resources and capabilities that cannot be replicated by competitors. 

Innovation strategies have also given the firm a competitive advantage and with it the superior cash flows that generate value, create and maintain value, based on different environmental dynamics.