IFC injects millions into Kenyan companies

by Elayne Wangalwa 0

IFC, the lending arm of the World Bank, is the largest global development institution focused solely on the private sector in developing countries. 

“We are increasingly adhering with corporates that are very sophisticated, look at their entire needs, they know that demand is there and then they find different ways of financing themselves in a way that is best suits the profile and the specific needs of the companies going forward,” Oumar Seydi IFC Director for Eastern and Southern Africa told CNBC Africa.

(READ MORE: Kenya’s cement market up for a stir)

The lender has invested 6.1 billion Kenyan shillings in the Devki Group, National Cement, associated with the Simba brand of cement. The cement firm is planning on expanding the capacity at its Athi River-based plant and constructing a clinker plant in Kajiado County. The cement maker on Wednesday signed the loan from IFC to partly finance its expansion plans.

National Cement has interests in local steel and services industries and the Kenyan subsidiary was started in 1986.

This is the second investment it is making in the manufacturing sector after the investing in Bidco Oil Refineries. Bidco secured a 3.2 billion Kenyan shillings loan from the World Bank agency on July 17.

With the money, the company plans to increase its annual turnover by 13.2 billion Kenyan shillings to about 35.1 billion Kenyan shillings in three years.

“We provide products that are different, our loans in general tend to have a longer mature yield which is typically what you want when you are building a product, if you are basically raising money for a project that will take some time to complete or also will take some time to reimburse,” Seydi explained.

Bidco currently manufactures edible oils, cooking fats, soaps, baking powder, animal feeds and detergents in 30 brands. The firm intends to expand its capacity in the production of soft detergents, agri-processing, including food and drinks processing.

Expansion will also result in the manufacturer increasing its labour force.

Over the last three decades, Bidco has become one of the largest manufacturers in the country. According to Kenya’s consumer insight, Bidco controls over 60 per cent of the cooking fat and 54 per cent of the cooking oil market in Kenya

Loans advanced to the manufacturing sector have increased by eight per cent to 183.7 billion Kenyan shillings in 2013.