NAIROBI, Kenya, May 6 – Kenyan firms continue to position themselves to take advantage of the opportunities that will be presented by the opening up of the East African region with the enforcement of the Common Market Protocol.
Athi River Mining (ARM) has opened an office in Dar-es-Salaam, Tanzania for its Rhino Special Products division signaling fresh interest for Kenyan companies in the country.
ARM Managing Director Pradeep Paunrana said the company intends to tap from the larger East African market which has a combined estimated Gross Domestic Product (GDP) of Sh5.4 trillion.
“We see enormous potential in the region for Rhino Special Products, a fast-growing business for us given the growth of the building sector in the region. We have seen increasing demand in quality internal and external design materials in the past two years as builders go for lively living rooms and offices interiors. It is an interesting trend and one that is very encouraging for us,” he said.
The company, he said, has already invested Sh50 million to establish marketing links for these products which include a broad range of tiles and adhesives for internal and external decoration materials.
The move is also being seen as a vote of confidence for Tanzania’s construction industry by ARM and is boosted by positive growth prospects.
Statistics from Tanzania’s Treasury indicate that the industry’s share of GDP will range between 8.6 percent and 8.9 percent between 2010 and 2012 respectively. The forecast is a key factor, buoying players into investing in the country.
“We now have a fully fledged Customs Union in place, and the commencement of a Common Market from July 2010 has the potential to give the people of East Africa full benefits of cross border trade and investment across the five countries under EAC. We believe that we can replicate the success witnessed in Kenya across in Tanzania,” said Mr Paunrana.
He expressed confidence that given that growth in the industry between 2002-2006 ranged between 11.3 per cent and accounted for around 7.7 per cent of the GDP, the forecast seemed achievable.
ARM has also set its sights on Ethiopia, whose economic growth is expected to hit 10 percent this year – one of the fastest in sub-Saharan Africa.
“Ethiopia’s construction industry is also growing through a robust stage in line with economic expansion which posted one of the best figures in the region last year. We are in the final stages of opening a marketing office there and we see potential for our business there too,” said Mr Paunrana added.