NAIROBI, Kenya, Apr 6 – Retail chain Uchumi Supermarket is considering having its shares cross listed in all the East African bourses.
Although Chief Executive Officer Jonathan Ciano declined to divulge the finer details of the process, he said it would take place after they are re-listed on the Nairobi Stock Exchange (NSE).
He expressed confidence that they would receive the requisite approvals from the Capital Markets Authority to go back to the bourse this week which would give them the green light to start the cross listing process.
“That (cross-listing) is not something I’d like to elaborate further; we are going to approach our board after we are listed and see how best we are able to provide this kind of a facility to the East African region,” said the new CEO of the retail chain that was recently lifted out of a three-and-a-half years receivership.
The chain which will in the next few months enter the Tanzanian market wants East African investors to have a share of the now profitable-company which was saved from the verge of collapse by a Sh625 million loan extended to it by the government.
“Now that we are in three countries and we may be going to other countries, it will be worthwhile to say that Uchumi is there and you can own it,” Mr Ciano proudly said.
The chain which in Kenya boasts of Sh10 billion in annual sales revenues and 20 million customers is also in Uganda where it started its operations in 2002.
He was also non-committal on when the process was likely to get underway saying there were still many regulatory hurdles that they had to go through.
“When you talk of cross-listing, some may call it a dream, you may call it a mission or a vision but that is something that will be deliberated by the authorities in these countries,” he added.
Mr Ciano spoke after signing a lease agreement with Quality Group, the Tanzanian developers of the premise which will house their first branch in Dar es Salam which is expected to open in June. The leasing of their premises is part of Uchumi’s strategy which sees it only spend funds on recruitment of staff and the equipment to be used in the supermarket.
Asked whether he envisaged any challenges in Tanzania, Mr Ciano said their focus would be on providing quality services which would hopefully translate into increased customer numbers and therefore a good return for their shareholders.
“From a strategy point of view, we adapt to the environment in which we are operating in and we work with the people who are in that country,” he said although he acknowledged that the coming into force of the East African Common Market Protocol in July would present immense opportunities for the region’s businessmen.
At the same time, he downplayed fears that the chain would be beaten by competition both in Kenya and in the other two markets adding that his concern was how to grow his business and not focus on what his rivals were doing.
Last month, Nakumatt – the largest retail store in Kenya – concluded a deal that saw it acquire four branches of Woolmatt Supermarkets, a move which was expected to enhance its presence particularly within the Central Business District.
“Our model looks at ‘how do I get more customers’ and not ‘how do I change the competitor’. My positioning and my interaction with the customer determines what I’m doing so if you imagine that there will be no competition, then there would be no Uchumi of the kind we are having today,” Mr Ciano said.
As part of its expansion plan and as it positions itself to increase its foothold in Kenya, the chain is set to open a new branch in Kericho on Friday and many more are slated for launching in various parts of the country within the next few months.