Ten Kenyan firms with diversified revenue streams
Diversification is becoming a common phenomenon globally as businesses embrace the strategy to manage risks or expand into new markets. Local companies are not left behind. Here are some of the entities which have added products and markets to boost revenue base, according to Smart Business, a market research and analysis centre.
1. Safaricom
Over the years, the giant telco has diversified its product offering to its millions of customers regionally and abroad. It is most renowned as the home of M-Pesa, a mobile banking SMS-based service, which has an estimated 20 million users.
Another service provided is Masoko, an online marketplace that gives one a wide variety of unique items that can be shopped from the comfort of an office or house.
Another service that is gaining big traction, especially in the urban settings, is Safaricom fibre, basically a portable internet box that small business or homes use for work or business transactions.
2. EABL
Generally known as East Africa’s leading branded alcohol beverage business with an outstanding collection of brands, East African Breweries Ltd is venturing into other softer beverages.
It began with the creation of Kenya Breweries Ltd in 1922 – the year the country brewed its first ever branded beer.
Today, the business is concentrated on three core markets of Kenya, Uganda and Tanzania and its products are sold in more than 10 countries in Africa and beyond. EABL has five production sites across the region and its operations support a range of industries and suppliers.
3. Bidco Africa
Bidco Africa, previously Bidco Oil Refineries Ltd, is a multinational consumer goods company headquartered in Thika, with subsidiaries and distributorships across 17 countries in East, Central and Southern Africa.
Started in 1985 as a soap manufacturing plant in Nairobi, it has grown to not only serve consumers’ needs in the edible oils and fats, hygiene and personal care category but has most recently set foot in the food and beverages category producing noodles, juices and carbonated soft drinks.
4. Express Kenya
The logistics company is among a growing list of businesses taking the ambitious road to better profits as real estate quickly becomes the favoured destination of many local companies that have embraced diversification as a growth strategy.
The firm spent Sh2 billion in 2016 to build the initial phase of its housing project (224 homes) on a 3.5 acre parcel of land in Nairobi’s Industrial Area as it seeks to boost dwindling revenues from its logistics business.
5. Car & General
The firm has been a leading supplier of generators, motorbikes, tuk tuks (auto rickshaws), laundry equipment, lawn mowers, scooters, marine engines, construction equipment and a wide range of power generation, automotive and engineering products in East Africa for 75 years. Car & General has subsidiaries in Uganda, Tanzania and Rwanda.
In Tanzania, it operates Kibo Poultry Products Ltd, one of the oldest chicken broiler farms in Africa, situated in Moshi. It is also pouring big money into real estate to diversify revenue streams.
6. Pwani Oil
The company began production of coconut oil in Mombasa. The operations expanded at the Jomvu factory with corn and sunflower manufacturing before settling for palm oil refining in 1985– a site where they are located to date. Pwani Oil is now one of the largest manufacturers of high quality edible vegetable oils and fats, laundry and toilet soaps in Africa.
7. Agro-Chemical & Food Company
The firm was established in 1978 to produce power alcohol from sugarcane molasses. This was to be blended with petrol to make gasohol as a national strategy for reducing foreign exchange used to purchase petroleum oil.
This programme did not succeed due to non-cooperation of oil companies. The company, through research and development efforts, shifted to producing various grades of spirits and yeast.
It has also diversified its product portfolio by investing in carbon dioxide production and bottled spirits mostly for industrial purposes.
8. Eveready
Since its incorporation in 1967, the firm has been synonymous with the manufacture of the dry cell battery commonly known as the D battery. The company invested in a manufacturing plant in Nakuru.
The battery has remained the manufacturer’s largest revenue contributor with over 60 per cent reliance. Additionally, the company has historical linkages through trade and shareholder relationship with US firms Eveready Inc. and Energizer Inc.
These formal relationships have allowed access to quality products and technology in the energy and lifestyle product categories.
The firm has also ventured into Real Estate. It has set up a subsidiary – Flamingo Properties Kenya Ltd – to spearhead its foray into the venture.
9. Keroche Breweries
In 1997, liberalisation of the alcohol industry exposed a critical market imbalance.
The brewing company research on drinking patterns within the middle level and low-income earners indicated the different market segments were not well catered for by the already established liquor manufacturers.
Using local raw materials, Keroche Breweries with a start-up capital of Sh500,000 ventured into fortified wines, favourable to the low-income market due to the low cost of production.
Within six years it had given an additional option of four bottled and quality drinks to persons reeling from the high cost of drinks by multi-national brewers.
It is investing Sh5 billion to increase its capacity and grow its share of the alcohol market to 20 per cent in about a year.
10. KenGen
As the leading power generation company in East Africa, Kenya Electricity Generating Company, has a diversified generation portfolio that consists of hydropower,
geothermal, thermal and wind power plants. The firm is also offering consultancy services, increasing steam sales and leasing out drilling equipment, in a move that could see it grow profits by more than 10 per cent. KenGen is also seeking to extract minerals such as silica and lithium from geothermal fluids in a bid to boost its revenue base.
