DPL petitions zero rate on wheat

December 16, 2008

, NAIROBI, Kenya, Dec 16 – Bread maker DPL Festive wants the government to consider zero rating wheat and its products for the country’s bread industry to remain competitive.

Chief Executive Officer Dipesh Shah told Capital Business in an exclusive interview on Tuesday that although import duty on wheat was lowered from 35 to 10 percent in the current budget, more needed to be done for the industry.

Mr Shah said Kenya’s bread was receiving stiff competition in the East African region due to the high tax rate.

“Uganda and Tanzania are at zero and 10 percent and if we can match them, obviously the wheat price will come down resulting in reduced bread prices,” Mr Shah said.

DPL Festive intends to list on the Nairobi Stock Exchange (NSE) in March next year and will be looking to raise Sh700 million while offering 40 percent of its stake to the public.

“We wanted to go for the IPO because it is a cheaper option compared to bank loans,” he revealed, adding that unlike loans, listing on the markets gives the company access to interest-free capital.

The bread maker has already finalised the appointment of advisors for the IPO.

Standard Investment Bank and PKF Consulting have been appointed as the Transaction Advisors for the issue. Co-operative Bank of Kenya will act as both the Receiving Bank and the Registrar while Mboya and Wangongu Advocates will be the Legal Advisors. 

The Reporting Accountants for the IPO will be PKF Kenya while Scanad Public Relations and Nuturn Bates will be the public relations and advertising agents respectively.

The additional capital expected from the IPO will be used to finance the bread maker’s expansion plans as well as marketing and distribution network.

DPL Festive will become the fourth family-owned company after Athi River Mining, AccessKenya and ScanGroup to list on the NSE.   

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