Haco Tiger Brands vows to remain in Kenya

September 28, 2011
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Kirubi Speaking / FILE

, NAIROBI, Kenya, Sep 29- Fast Moving Consumer Goods (FMCG) giant Haco Tiger Brands has reiterated its commitment to use Kenya as its manufacturing hub despite the hard economic times facing the country.

Visiting Haco Tiger Brands Chief Executive Officer Peter Matlare argued that the effects of a weak shilling and high inflation that the country is grappling with are temporary issues that will not deter them from investing heavily both in infrastructure and human resource.

“Our partnership is not a short term partnership; this is for the long term. It is not just for Kenya or South Africa but our partnership has to extend beyond this region,” the CEO declared.

Observing that the tough economic times were a global phenomenon and in a bid to counter these challenges, Matlare said they have had to be more innovative and adopt strategies that will enable their business to thrive.

“It is in times like these that we are going to have to be more creative, more inventive in sustaining jobs and investing in areas where we will continue to see growth,” he said in a matter of fact way.

Kenya has been a key investment hub for the FMCG giant which was formed after manufacturing giant Haco entered into a joint venture with the South African firm Tiger Brands three years ago to create a visionary pan African company.

Their vision that Tiger Brands had of Kenya as a land flowing with opportunities and having the potential to be the launch pad to the rest of the East Africa region, has not changed.

In this regard, plans to go beyond manufacturing personal and homecare consumer products and venturing into agribusiness and other processing initiatives are still on course, the CEO said.

By banking on Kenya’s competitive advantage of well educated workforce, economic strength and geographical proximity, the visionary company wants to use the country as a base for local value addition and the manufacture of many of its products.

“We are now at the stage where we are saying, ‘which new areas should we be going into?’ the work we are doing is not frivolous; its work that needs to address core areas of what are essential products within the economy and local manufactured,” Matlare said although he remained guarded on what the strategy involved.

These projects are geared to transform the firm into a pan-African firm. With this vision at hand, Haco Tiger Brands is already acting as one and has a business strategy to match.

Chairman Chris Kirubi pointed out that this plan has helped them double their top line growth every year since their joint venture in September 2008 and they expected this to hold true going forward.

With an investment of over Sh1 billion over the next few years and a continued focus of delivering quality products to the different market segments, the future can only be bright, the industrialist added.

Kirubi, a big advocate of the need to promote locally manufactured products appealed to consumers to play their part and help build Africa.

“Everybody must protect their home base. To do this, consumers must also adore and protect the products that generate jobs for themselves,” he said.

However, although he exuded optimism about the outlook of the company, the mogul has expressed concerns about the regulatory frameworks such as the newly enacted price control law saying it might have a negative impact on the economy.

He says Kenya is a liberalised market economy where only demand and supply forces should determine the prices of commodity. If such a market is not influenced by monopolistic tendencies, then producers are compelled by the demand and supply forces to make quality goods and services.

This enhances competition and efficiency in the market which means cheaper and high quality goods.

The opposite is however true, should the government insist on controlling prices.

“The biggest problem will be shortages of those products which anybody will try to control prices. If there is shortage, people will sell products behind the doors or under the tables and eventually, people will pay higher prices,” he cautioned.

Competition, he said is the only thing that can help to control the cost of living while appealing to the government to engage the private sector in working out a formula of how the Price Control (Essential Goods) Act 2011 will be implemented.

The same attention should be accorded to the shilling which has been on a free fall and is wrecking havoc on the country’s balance of payment.

He called on the Central Bank of Kenya to take actions that would stabilise it to levels that are beneficial to the economy.

It is such protection of the economy that would enable Haco Tiger Brands and other such companies to create more employment opportunities, expand their operations and contribute to the country’s economic growth.

Already such prospects are possible as evidenced by the hiring of 120 workers who were on casual employment on a permanent and pensionable basis.

“We do have motivated employees, we have a wide variety of products for our consumers and we are looking forward to the future,” Managing Director Polycarpe Igathe said.

He sought to assure the customers that despite the high cost of production, they would not adjust the prices of their products upwards and would instead ensure that they deliver value to them.

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