NAIROBI, Kenya, May13 – Oil Marketer KenolKobil is set to invest $10 million (Sh857 million) into real-estate projects in a number of its subsidiaries.
The investment in real estate comes as the firm looks to diversify its revenue generation channels.
KenolKobil Group Chairman Jacob Segman described it as a strategic decision to focus on non-fuel businesses that will boost its bottom line.
“We believe it’s the future for oil companies to venture into (non-fuel),” Mr Segman told journalists on Friday.
The developments will be concentrated in Kenya, Rwanda, Ethiopia and Zambia where KenolKobil intends to put up residential units and shopping complexes.
Mr Segman said the oil firm would replicate the diversification strategy across all its subsidiaries.
In March, Mr Segman said the group intended to grow the contribution of its non-fuel businesses from the 10 percent 25 percent within the next six to ten years.
KenolKobil’s major project will be in Ethiopia where it has acquired 17,000 square meters (39 acres) of land in the heart of Addis Ababa.
“We intend to convert it from a fuel storage facility into residential development, shopping centers and so on,” Mr Segman said adding that development would kick off in 2012.
Projects in Kenya and Zambia are underway with that in Rwanda set to break ground in September. The Chairman said the oil firm also had major plans in Liquefied Petroleum Gas (LPG) and lubricants.
“We have completed projects in Nairobi, Kigali and Kampala. We are moving into Dar-es-Salaam and Ethiopia in the area of gas. We believe in it a lot and that is something we intend to keep focusing on,” Mr Segman said.
The group has been on an expansion strategy in Africa with operations in seven African markets including Tanzania, Burundi and Rwanda. Other markets include Mozambique and Zambia with prospects of moving into Zimbabwe.
He said KenolKobil would continue focusing on the Central, Eastern and Southern Africa regions to grow its business.
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