Keroche plant gets PM thumbs up

October 24, 2008
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, NAIVASHA, October 24 – Prime Minister Raila Odinga has lauded the Naivasha-based Keroche Industries for investing Sh1 billion in a new plant and said the trend was an indication that local investors had the capacity to accelerate development in the country.

The PM who was the chief guest at the launch of Keroche\’s new beer Summit Lager, commended the resilience of the company management to beat impediments in the last decade.

"Not many people would put a billion shillings of borrowed capital on a project that was sure to upset the existing order so drastically," he said.

Mr Odinga reiterated the government\’s commitment to removing bottlenecks that have frustrated local investors over years.

"I encourage all investors to give regular feedback on our policies to help us know how responsive to business our taxation and regulatory procedures are," he said, adding that the second round table meeting with the Private Sector Alliance is due in a few weeks to review recommendations made at the first meeting on January.

The company started 10 years ago with fortified wines as its flagship brands but was engaged in a protracted battle with the Kenya Revenue Authority on taxes.

The increase in taxation pushed its products from the targeted low end market to the high end, while the same products from multi nationals were zero rated forcing it to abandon production.

The management however resolved to invest in beer manufacturing and installed a state of the art plant capable of producing 6,000 bottles an hour.

Speaking during the launch the Chief Executive Officer Tabitha Karanja called on the government to remove obstacles for local investors. "Foreign investment is good but it can never be a substitute for local ownership and innovation. Local investments are crucial in helping the country achieve vision 2030," she said and urged the government to ensure fair play in business.

The PM criticised the battles Keroche had faced from monopolies in the sector for several years.

"Competition in business is the lifeline of the private sector and ensures efficiency and sufficient quantity in production."

Noting that the beer market in Kenya was renowned for its convulsions, the PM decried the local market intricacies.

"Business has in the past been made unnecessarily complicated for locals," he said and also noted that Barclays Bank\’s support to Keroche Industries was a big sacrifice.

The PM said Keroche\’s struggle against numerous business odds personified decades of struggle of the Kenyan spirit.

On his part, Finance assistant Minister Oburu Odinga said foreign investment was not always stable and that the Government would introduce tax incentives to Kenyans to try to set up local industries.

Keroche Industries is the first locally fully owned brewery with international standards and has bought Italian and German state-of-the-art plant equipment.

The plant produces four million bottles of beer a month and is expected to give to the Exchequer about Sh1 billion in taxes every year.

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