SA Firm Expands to Nairobi, Targeting Construction Billions

Distribution & Warehousing Network Limited (DAWN), a South African company that manufactures construction products, is expanding to Kenya in a bid to tap into the country’s lucrative building and construction sector.

The company which is listed on the Johannesburg Stock Exchange said it would set up shop in Nairobi in January 2014 to distribute its branded hardware, plumbing, kitchen, sanitary ware, engineering, and civil products.

DAWN chief executive Pieter van Niekerk said: “We have interests in Tanzania and we have successfully exported to Kenya from South Africa during the past years. We want to have a presence and inventory in Kenya to improve our market offering.”

DAWN said it would spend US$ 1 million to set up a fully-fledged centre in Nairobi and to hire 12 employees. The firm joins compatriots Sanlam and Stanlib, which have announced plans to invest as much as Sh10 billion in the Kenyan real estate sector.

Stanlib, a subsidiary of South Africa Liberty Group, recently said it was planning to invest Sh5.2 billion in the construction of a maximum of two malls in Nairobi within two years.

The projects will be financed through the US$150 million Stanlib African Direct Property Development Fund that was launched in May.

“It is still early and we have signed non-disclosure agreements so we cannot discuss where exactly they will be but we can say Nairobi,” said Ferreira, the fund’s manager.

South African firm Sanlam announced in June that it would invest Sh5.5 billion in the Kenyan real estate sector through the US$1 billion Sanlam Africa Core Real Estate Fund that was launched in May on the Mauritius Stock Exchange.

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The Kenyan construction industry is experiencing growth as a result of increased population and government spending on major infrastructure projects around the country.

The residential construction sector is expected to grow as both the government and private developers try to keep up with the rising demand for housing – occasioned by the rise in population.

The value of approved home plans in Nairobi increased by 115 per cent in the first half of this year, according to a report issued recently by the Kenya National Bureau of Statistics (KNBS).

KNBS data indicated that residential building plans approved during the period rose to Sh51 billion compared to Sh23.7 billion in the first half of 2012, due to rising demand for housing.

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