In May, Crown Paints Kenya Limited announced a 49 percent
increase in pretax profit for the year ending 31st December
2013. We recorded a Ksh 333.4 million profit in the year under
review compared to Ksh 224 million in the previous year.
Crown Paints CEO Rakesh Rao attributed the impressive results
to aggressive sales and improved efficiencies that saw the
company’s turnover improve significantly from Ksh 4.2 billion in
2012 to Ksh 5.1 billion in 2013. “We managed to grow our sales
despite the high interest rate environment. In addition, year-
on-year growth has ranged between 40-50 percent hence the
rise in turnover,” said Rao. The directors have recommended
a dividend per share of Ksh 1.75 for the year ended 31st
December 2013.
The CEO, however, observed that the paint industry had
become very competitive as evidenced by increased pressure
on margins. “The industry is becoming very competitive from
a price perspective. However, our focus on introducing new,
innovative products into the market is paying off. We are
optimistic about the future,” he reiterated.
With the growth of the construction sector averaging 15 percent
over the last six years, we have positioned ourselves to reap
from the increased demand for our products especially in the
premium category. “The high-end product market has been
growing. Premium category now accounts for 40 percent of
our sales compared to 20 percent two years ago,” explained
Rao. On regional expansion, Crown Paints was firmly on track
to entrench its presence in the region using a unique model of
setting up mini-plants that feed demand for specific regions.
“We have aggressive plans to entrench our regional presence.
We are putting up satellite factories in Arusha, Mwanza and Dar
es Salaam at an estimated cost of USD 3 million.” Crown Paints
also plans to increase exports to Rwanda, South Sudan and
Somalia.
In May 2014, Crown Paints Kenya Limited
commissioned a Ksh 300 million paint
factory in Kisumu county, the first of its
kind outside Nairobi. The factory, which
will be located in Kisian Junction along
Kisumu‑Busia Road in Kisumu county, will
manufacture various paint products and
its first production of water-based paints
is expected to be ready in 2015.
Speaking during the groundbreaking
ceremony at the Kisian grounds, Kisumu
county governor Jack Ranguma lauded
Crown Paints investments saying, “It is our
desire to create, connect and call you to a
higher goal of partnership in order to make
Kisumu the desired COMESA city of choice
for investment, holiday and trade in
10 years.”
Mr Ranguma added, “Kisumu is among the
urban areas that have created the highest
number of jobs in construction, banking and
insurance.” Crown Paints CEO Rakesh Rao
added, “Kisumu is a regional hub with great
infrastructure and proximity to the greater
Western and North Rift regions hence
making our project viable. Our business in
the region grew by over 30 percent in 2013.
Groundbreaking ceremony at the
Ksh 300 million factory in Kisumu
The project will be funded internally and
from various Crown Paints subsidiaries.”
After completion, the raw materials to
manufacture water-based paint will be
transported from Nairobi to the site for
mixing, packaging, storage and dispatch
to the market.”
“This will drastically reduce the company’s
operation costs, which will in turn lead to a
reduction in the price of water-based
paints and increase service delivery to
our customers in the region,” Rao said.
The CEO hinted that the project will provide
over 100 job opportunities to the locals. In
addition, as a socially responsible corporate
citizen, Crown Paints has initiated several
societal investments to positively impact
on the local community starting off with the
painting of Ongalo Secondary School and
Nyawara Primary School, as well as work
with the county government to invest in
education through scholarships for students
from needy families. Crown Paints received
an approval from the National Environment
Management Authority (NEMA), paving the
way for construction.
Crown Paints upbeat
with a 49% pretax
profit
Crown Paints Kenya Chairman Mhamoud Charania and Vice Chairman
Hussein Ramji deliberate during the 2014 Annual General Meeting held
at Panafric Hotel.
A USD 4 million investment in the Tanzanian
market has been announced in a bid to grow
our market share across borders. Speaking
during the Annual General Meeting held
at the Panafric Hotel Nairobi, Group CEO
Rakesh Rao said “We have aggressive plans
to entrench our regional presence in East
Africa. We will start with putting up satellite
factories in Arusha and Dar es Salaam.”
With growth of the construction sector
averaging 15 percent over the last six years,
Crown Paints has positioned itself to reap
Entering new markets
from the increased demand in the region
for its products especially in the premium
category. The company has also opened
showrooms in Mombasa, Nakuru and 2 in
Nairobi, bringing the total to four, with a
promise to open three more in Eldoret and
Nairobi to meet increased market demand
owing to the current property boom in the
economy.
The company Chairman, Mhamud Charania,
reiterated that the company was firmly on
track to boost sales in the region using a
unique model of setting up mini-plants that
feed demand for specific regions. “We plan
to increase exports to Rwanda and Somalia
to further improve sales.” This as the
company registered an increase in combined
volume sales of South Sudan, Rwanda,
Burundi and Tanzania in the year 2013.
Crown Paints Kenya through strategic
partnership recently announced the
availability of a new product in its growing
product portfolio. The local company will
now distribute Fevicol adhesives in the
August 2014
6
regional updates
financial update
7
Crown Paints Kenya Vice Chairman Hussein Ramji and
other esteemed guests at the groundbreaking ceremony.
local market in collaboration with Pidilite
Industries, Asia’s leading adhesive, sealants
and construction Chemicals Company.
Rao said the paint industry had become
very competitive as evidenced by increased
pressure on margins. “The market is very
competitive from a price perspective.
However, our focus on introducing new,
innovative products into the market is paying
off. We are optimistic about the future.”
