Crown Paints has opened a Ksh400 million plant in Kisumu as part of its strategic move to tap into the region’s robust construction industry. The new plant, opened last week, with a production capacity of 1.3 million litres of paint per month will be expected to cut down operations costs significantly as it seeks to cash in on the growing real estate market in the Western region.
Crown CEO Rakesh Rao said the area is experiencing high development growth particularly in real estate with a larger number of investors eyeing towns such as Kisumu, Eldoret, Kitale and Kakameg which creates a ideal opportunity for the firm to strengthen its presence to exploit the growing market.
Under devolution many counties are witnessing growth in the real estate sector with significant investments being made in housing and commercial developments which the Paint manufacturer is eyeing. The Nairobi Securities Exchange-listed firm has been on massive growth strategy which has seen it open over five showrooms in the country since last year at a cost of over 100 million.
“This region produce over 40 percent of the company’s sales and establishing a new plant in Kisumu which is very central regionally, will not only enhance efficiency but also improve our sales due to the rapid growth of the region.”
The plant will be expected to create hundreds of jobs directly and indirectly to the locals. The Nairobi Securities Exchange (NSE) listed firm with an annual turnover of more than Ksh6 billion is expected to use the Kisumu plant as a launching pad into the wider East African market particularly Tanzania.
“As part of our continuous innovation, setting up of this plant which we are referring as the ‘Greenfield project’ for manufacturing paints in Kisumu will cater for the Western region and also export to our neighboring Tanzania”, Rao noted.
The firm’s performance in Tanzania has been difficult due to high operation costs and setting up of Kisumu plant is expected to boost the firm’s sales and market share. “We anticipate revenues from paints and coatings industry in Kenya and Tanzania to rise from USD123.3 million to USD188.5 million by the year 2018. As Crown Paints expect rapid growth in the coming years due to robust growth of the construction industry which will lead to more employment opportunities for Kenyans and direct contribution to the Country’s GDP”, he argued.
The Principal Secretary State Department of Industry and Enterprise Development, Mr Julius Korir, who graced event together with Kisumu Governor Jack Ranguma called on counties identified by government as special economic zones to hasten the process. the zones were set up in coast area and Nyanza to drive SMEs growth. He said the plan was meant to provide investors unlimited access to local and international markets.
Mr Ranguma lauded Crown Paints move to establish a plant in county, acknowledging that the paint company was reinforcing the fact Kisumu county was on the right track in establishing itself as an economic hub of the region.
