Kenyan parastatal opposes sale plan

February 11, 2010
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, NAIROBI, Kenya, Feb 11- The management and board of Numerical Machining Complex are against a proposal to privatise the engineering company in a bid to enhance its efficiency.

The Managing Director George Onyango said on Thursday that the complex should be given the chance to prove that it can spearhead the industrialisation efforts which would go a long way in transforming the country’s manufacturing sector.

“This company has been threatened with privatisation but if the government privatises this company at this time, it will be a big loss to the program of industrialisation,” he said adding that they were gearing themselves up for the production of capital goods for agribusiness, technical and vocational education and training centers and Small and Medium Enterprises sub-sectors.

The ‘dream team’ formed in 1999 to institute reforms in government had recommended the winding up of the parastatal – whose 51 percent stake is held by the Kenya Railways Corporation and 49 percent by the University of Nairobi – which by then was on its death bed.

Last year, the complex, which was incorporated in 1994, was one of the companies that were earmarked for privatisation. The Privatisation Commission of Kenya went ahead and advertised for bids to evaluate the company for possible privatisation.

The NMC which manufactured the non-operational Nyayo Pioneer car was revived in 2007 after the government allocated an initial Sh18million to the complex in the 2007/2008 budget.

Chairman Jonathan Mturi echoed the MD’s views adding that NMC should only be sold off once it has turned into a profit making venture.

“It is too early for us to give up on NMC. Let us keep on nurturing this place until such a time when it is up and running and then you can ask the wananchi to buy maybe 60 percent of the shares through the stock exchange,” Mr Mturi who spoke during the launch of the company’s ISO certification and Strategic Plan launch pleaded.

However, Industrialisation Minister Henry Kosgey who was present at the function steered clear of the issue only stating that the government would support the complex to have a steel producing plant like it had requested.

This, he added would be reinforced by the government’s efforts to ensure availability of raw materials through for instance the export ban of scrap metal.

Mr Kosgey said the government would finance the complex so that it can start producing products not only for industries such as tea, cement and sugar processing but for the SME sector instead of importing them.

“We have realised that these industries imported their manufacturing plants from other parts of the world and only brought them to be installed in Kenya. When these plants require spare parts they still have to import them. We know that these parts can be manufactured here in Kenya at NMC at competitive prices,” he said.

The firm has already developed among other machines and parts, water pumps which can be used for cultivation.

“I will therefore be asking NMC to be prepared to meet the need in production of more pumps as we coordinate with the Agriculture Ministry to establish how we will sell them to the farmers,” the minister said adding that this would spur demand for more pumps.

Mr Kosgey also challenged the complex to come up with other innovative products which they would sell to the other member states of the East African Community who were gearing up for the common market in July.

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