kenya chocolate

8/12/2019 Kenya chocolate

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A

GLOBAL/COUNTRY STUDY REPORT

ON

KENYA

Submitted to

Christ Institute of Management

IN PARTIAL FULFILLMENT OF THE

REQUIREMENT OF THE AWARD FOR THE DEGREE OF

MASTER OF BUSINESS ASMINISTRATION

In

Gujarat Technological University

UNDER THE GUIDANCE OF

Mr. Bhuvan Dave

Assistant Professor

Christ Institute of Management

Affiliated to Gujarat Technological University

Ahmedabad

April, 2012


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INDEX

Sr. No Particulars Page No.

1. Demographic Profile of the Kenya 3

2. Economic Overview of the Kenya 6

3. Overview of Industries Trade and Commerce 9

4. Overview Different economic sectors of Kenya 12

5. Overviews of Business and Trade at International

Level

15

6. Present Trade Relations and Business Volume of

different products with India

18

7. PESTEL Analysis 21

8. A Study of Automobile sector with reference to Kenya

Vehicles Manufactures Limited.

24

9. A Study of Rea Vipingo Limited 41

10. A Study of Tea Industry with reference to Kenya Tea

Packers

60

11. A Study of Opportunities in Agriculture & Cultivation

Industry

72

12. A Study of Tea Industry in Kenya 91

13. A Study of Power Generation Market 114

14.A Study of Bamburi Cement Limited

138


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Partial Submission of Global country study ( 2830003)

Country Selected: Kenya

College Code : 789

College Name: Christ Institute of Management

Faculty guide : Mr. Bhuvan Dave

Facult e-mail : [email protected]

DEMOGRAPHIC PROFILE OF KENYA


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SUMMARY OF DEMOGRAPHIC PROFILE

Reports of any inhabitants based upon variables for instance era, ethnic

background, sexual, monetary standing, education level, cash flow levels along with job,

and the like. Demographics are widely-used by simply governing bodies, organizations

along with non-government companies to some sort of population's attributes for most

requirements, which include insurance policy growth along with monetary general

market trends. Change in factor listed above are play very important role in any economy.

Changes in size of demographic factors result in change in economic environment,

political environment and culture.

Demographic trends are also important, as the size of different demographic

groups will change over time as a result of economic, cultural and political circumstances.

Population

41,070,934 (July 2011 est.)

Age structure

0-14 years:42.2% (male 8,730,845/female 8,603,270)

15-64 years:55.1% (male 11,373,997/female 11,260,402)

65 years and over:2.7% (male 497,389/female 605,031) (2011 est.)

Median age

Total:18.9 years

male:18.8 years

female:19 years (2011 est.)

Population growth rate

2.462% (2011 est.)


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Birth rate

33.54 births/1,000 population (2011 est.)

Death rate

8.93 deaths/1,000 population (July 2011 est.)

Urbanization

Urban population:22% of total population (2010)

rate of urbanization:4.2% annual rate of change (2010-15 est.)

Sex ratio

At birth:1.02 male(s)/female

under 15 years:1.01 male(s)/female

15-64 years:1.01 male(s)/female

65 years and over:0.83 male(s)/female

total population:1.01 male(s)/female (2011 est.)

Size

The total area of 582,650 square kilometers (somewhat larger than France) includes

13,400 square kilometers of water, mainly in Lake Turkana (also known as Lake Rudolf) and

Kenyas portion of Lake Victoria.

Land Boundaries

Kenyas land boundaries total 3,477 kilometers.The country is bounded by Ethiopia

(861 kilometers), Somalia (682 kilometers), Sudan (232 kilometers), Tanzania (769 kilometers),

and Uganda (933 kilometers).


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A

Global Country Report

On

Economic Overview of Kenya


College Code : 789

College Name : CHRIST INSTITUTE OF MANAGEMENT

Faculty Guide: Asst.Prof. Meera Mody

Facultys Email: [email protected]


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Overview

The actual macroeconomic overall performance from the Kenyan economic climate

enhanced considerably this year in contrast to this year. As the economic climateincreased through second . 6% last year, approximately the expansion price associated

with low household item (GDP) almost bending to achieve five. 0% this year. The rise

within development could be related to the great rainwater throughout the year 2010 as

well as greater costs with regard to Kenyan export products upon globe marketplaces. The

actual large quantity associated with farming outcome, along with improved competitors

in certain crucial solutions, assisted consists of monetary inflation this year. Still the actual

Kenyan economic climate encounters 2 difficulties: diversity and also the decrease ofreliance on the actual inconsistencies associated with character.

Recent Economic Developments and Prospects

Kenyas principal seeds, that is maize, chili, oranges along with herbal tea, saved important

improves throughout manufacturing in fact. Nonetheless horticultural merchandise, coffee

beans along with sugarcane saved decrease numbers of end result along with move in fact

in comparison with last year. Airline flight termination due to volcanic eruption

throughout Iceland, too little rain along with despondent desire via Kenyas classic

blossom niche categories the worse for with the world-wide economic recession are

generally on the list of principal issues encountered by simply Kenyas horticulture export

products in fact. Subsequently, horticultural export products expanded merely somewhat,

by simply three or more. 7%, when horticultural manufacturing enhanced by simply your

five. 7%.

Structural Issues

Private Sector Development

The excellent functionality on the Kenyan financial system plus the slow restoration on the

world-wide financial system in fact contributed to typically the board throughout stock trading

pursuits with the Nairobi Bourse (NSE). Typically the NSE thirty talk about listing flower by

simply 56% involving October last year along with August the new year.


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Various other The latest Trends Typically the 2010/11 finances emphasises lawn along with

country growth, throughout identification involving agricultures key side of the bargain for you

to GROSS DOMESTIC PRODUCT (23%), in addition to job along with export products.

Typically the strategys principal aims are going to safeguarded livelihoods throughout country

regions and be sure foodstuff safety measures along with job.

Political Context

Typically the disorders on the 07 elections brought on some sort of say involving brutalit

over the state. Throughout 2008, some sort of power-sharing commitment ended up being

agreed upon involving Chief executive Kibaki plus the other. Throughout The spring 2008,

some sort of 42-member ligue pantry ended up being sworn for the reason that bundled

brand-new ministries intended for cooperative growth, N . Kenya growth along with

Nairobi metropolitan growth. Some sort of change schedule ended up being portion of the

power-sharing commitment. The essence typically the constitutional change is usually to

enhance the potency of the program involving controls. Typically the Constitutional

Assessment Work involving 12 , 2008 presented the cosmetic penning. That kicks off in

august the new year, Kenyans selected as with a referendum to the brand-new cosmetic.

Typically the cosmetic got wide-ranging assist along with ended up being allowed by 66.

9% on the arrters

.Social Context and Human Resource Development

Modest progress has been made towards achieving most of the Millennium Development Goals

(MDGs). The country is considered off-track when it comes to eradicating extreme poverty

(MDG 1) by 2015 though the percentage of population below the poverty line did drop from 56.

0% in 2000 to 46. 9% in 2008/09. High inflation rates between 2003 and 2009 have eroded the

purchasing power of the population, dramatically affecting the poor and most vulnerable.

Persistent poverty and unemployment, particularly among youth, remain major challenges.

Kenyas Human Development Index (HDI), where 0 is the lowest score and 1 the highest, has

increased from 0. 464 in 2009 to 0. 470 in 2010, compared with 0. 389 in sub-Saharan Africa

and 0. 624 in the world. The country belongs to the group of those where human development is

low ranking, 128th out of 169 countries. The Youth Development Index (YDI) evaluates the

degree of inclusion and social integration of youth in education, health and income. Kenyas

YDI is slightly above its HDI at 0. 5817 in 2009. Looking at the composition of this index,

income appears to be the major challenge with Kenyas Youth Income Index at 0. 44.


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Partial Submission of Global Country Study (2830003)

Semster-3

Country selected: Kenya

College code: 789

College : Christ Institute of Management

Faculty Guide: Mr. Alex Daniel


OVERVIEW OF INDUSTRIES TRADE AND COMMERCE


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Agriculture

seventy-five per cent regarding functioning Kenyans produced their particular existingaround the terrain. Agriculture will be the next greatest contributor to be able to

Kenyas GDP as soon as the services industry. The key funds plants are usually tea

and coffee. Huge probability of culture according to rain fall as well as the remarkable

variations in the rates regarding farm goods.

Forestry and Fishing

Resource degradation has reduced output from forestry. Fisheries are of local

importance around Lake Victoria and have potential on Lake Turkana Kenyas total

catch reported in 2010 was 128,000 metric tons. Output from fishing has been

declining because of ecological disruption. The uses of unauthorized fishing equipment

have led to falling catches and have endangered local fish species.

Mining and Minerals

Kenya has no significant mineral endowment. Kenyas mineral production in 2010

reached more than 1 million tons. One of Kenyas largest foreign-investment projects in

recent years is the planned expansion of Magadi Soda.

Manufacturing

Despite the fact that Kenya is one of industrially produced region inside Eastern side

Cameras, producing continue to is liable for simply 13 per cent regarding major home-

based product or service (GDP). Extension in the industry following freedom, in the

beginning fast, provides stagnated considering that the nineteen-eighties, hampered

simply by shortages inside hydroelectric, main stream15142 fees, dilapidated transfer

structure as well as the dropping of cheap imports Professional exercise, centered

across the the canaries largest city facilities, Nairobi, Mombasa and also Kisumu will

be decided simply by food-processing sectors like materials milling, ale generation, and

also sugarcane killer, as well as the manufacture regarding buyer items.


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Energy

The largest share of Kenyas electricity supply comes from hydroelectric stations at

dams along the upper Tana River as well as the Turkwel Gorge Dam in the west.Kenyas installed capacity stood at 1,142megawatts a year between 2001 and 2003.

Tax and other concessions are planned to encourage investment in hydroelectricity

and in geothermal energy in which Kenya is a pioneer. Petroleum accounts for 20 to 25

percent of the national import bill. Kenya Petroleum Refineriesa 50:50 joint venture

between the government and several oil majorsoperates the countrys sole oil

refinery inMombasa,which currently meets 60 percent of local demand for petroleum

products.

Tourism

Kenyas services sector, which contributes about 63 percent of GDP, is dominated

by tourism. The tourism sector has exhibited steady growth in most years since

independence and by the late 1980s had become the countrys principal source of

foreign exchange. Tourism is now Kenya's largest foreign exchange earning sector,

followed by flowers, tea, and coffee. In 2006 tourism generated US$803 million, up

from US$699 million the previous year.

Overview of Kenya`s Trade policy

Kenya's general trade policy objectives are economic management for renewed

growth.

Trade policies in Kenyas primary objective is the promotion of exports of

consumer and intermediate goods, while at the same time laying the base for

eventual production of capital goods for both domestic and export markets.

The Government has put into place various incentives such as:

The duty and VAT remission;

Manufacturing under bond scheme;

Export processing zones.

a. Agriculture.

b. Manufacturing Industry

c. Trade Policy Implementation
http://en.wikipedia.org/wiki/Mombasahttp://en.wikipedia.org/wiki/Mombasa


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Partial Submission of Global Country Study (2830003)

Semster-3

Country selected: kenya

College code: 789

Faculty Guide: Mr. Dhaval Motwani

Facultys Email:[email protected]

OVERVIEW OF DIFFERENT ECONOMIC SECTORS OF KENYA
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OVERVIEW OF DIFFERENT ECONOMIC SECTORS OF KENYA

EconomyWith regards to 72% involving Kenyans are generally engaged in harvesting, generally on the

subsistence variety. Coffee beans, herbal tea, corn, wheat or grain, sisal, along with pyrethrum

are generally cultivated from the highlands, mostly about smaller African-owned plants

produced by simply splitting up many of the significant, earlier European-owned large homes &

acres. Coconuts, pineapples, cashew insane, silk cotton, along with sugarcane are generally

cultivated from the lower-lying regions.

Agriculture

lawn care segment consistently command Kenyas economic system, while solely 18 per-cent

connected with Kenyas full area place features ample in addition to bad weather for being

farmed, then 6 as well as main per-cent is usually categorised seeing that vivid area. In 2006

pretty much 70 per-cent connected with performing Kenyans manufactured all their dwelling

for the area, weighed against 80 percent with 1980. In relation to one-half connected with full

lawn care production is definitely non-marketed subsistence development. Agronomie is a

secondly major contributor to help Kenyas yucky local solution, once the provider segment .

Industry and manufacturing

Though Kenya is among the most industrially designed state throughout Far east Photography

equipment, making nonetheless makes up merely 12 pct involving uncouth home merchandise

(GDP). This kind of a higher level making GROSS DOMESTIC PRODUCT presents simply a

moderate enhance considering that self-sufficiency. Development on the market soon after self-

sufficiency, originally speedy, possesses stagnated since eighties, affected by simply shortages

throughout hydroelectric electrical power high energy charges, dilapidated move commercial

infrastructure, plus the getting rid of of inexpensive imports. Nonetheless caused by

urbanization, the automotive market along with making important are getting to be significantly

crucial that you typically the Kenyan financial system, and contains also been returned by

simply a rising GROSS DOMESTIC PRODUCT each household.

Energy

The most important talk about involving Kenyas electric power offer derives from

hydroelectric programs with ravage down the uppr Covo Sea, plus the Turkwel Mountainous

Dam in the west. Kenya possesses still to get hydrocarbon stored about their location, inspite of

numerous generations involving spotty query. Though Quotes remains typically the look for off
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of Kenyas coast, Kenya at present imports most unsavory oil demands. Oil makes up thirty for

you to 25 percent on the country wide transfer invoice. Kenya Oil Refineries-a 60: 60

partnership amongst the govt many olive oil majors-operates typically the countrys exclusive

olive oil refinery throughout Mombasa, which often at present fits 58 pct involving community

require oil merchandise. In 2004 olive oil ingestion ended up being believed with fityfive, 000

barrels (8, 800 m3) every day. A lot of the Mombasa refinerys manufacturing is usually sent by

using Kenyas Mombasa-Nairobi conduite.

Financial services

Kenya is definitely Distance in addition to Middle Africa's link to get Fiscal expert services.

Often the Nairobi Stock Exchange (NSE) is definitely graded last with If you have with regard

to Sector increased. Often the Kenya business banking method is administered by Middle

Standard bank connected with Kenya (CBK). Nowadays September 2004, the training courseconsisted of 43 professional finance institutions (down by twenty four with 2001), various non-

bank loan companies, like home finance loan corporations, some enough cash in addition to

college loan romantic relationships, and lots of ranking foreign-exchange credit reporting

agencies. A pair of often the some major finance institutions, often the Kenya Professional

Standard bank (KCB) along with the State Standard bank connected with Kenya(NBK), usually

are moderately government-owned, along with the different a couple usually are the vast

majority foreign-owned (Barclays Standard bank in addition to Typical Chartered). The vast

majority of quite a few small finance institutions usually are family-owned in addition to

operated

Tourism

Kenyas expert services segment, which will gives in relation to 63 per-cent connected with

GDP, is definitely centered by means of vacation. Often the vacation segment features

established continuous growing in the majority of several years due to the fact liberty and by

often the delayed 1980s came into existence often the countrys law method.

Forestry and fishing

Source of information wreckage includes lessened productivity out of forestry. In year

2004. Yet , productivity out of sport fishing may be turning down owing to

environmentally friendly of your. Co2, overfishing, as well as using of suspicious sport

fishing machines currently have brought about going down assaults and now have

endangered area the fish race


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Partial submission of Global Country Report(2830003)

Semester-3


College Code:789

College Code: Christ Institute of Management, Rajkot

Faculty Guide:- Asst.Prof.Nishant Mehta

OVERVIEW OF BUSINESS AND TRADE AT INTERNATIONAL LEVEL


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OVERVIEW OF BUSINESS AND TRADE AT INTERNATIONAL LEVEL

Introduction

The need for formulation of a National Trade Policy is founded on a notion that promoting

trade is key to Kenyas development in an environment characterized by rapid technology and

progress and globalization. The intensification of competitive pressures in liberalized regimes,

also make it more important to mount a trade policy.

After independence, Kenyas trade efforts were mainly guided by import substitution

strategy. The Sessional Paper No. 10 of 1965 mainly centered on trade development and

pursued enhanced protection of the domestic market to help develop industries. The Policy was

a key influence on the development of trade regime in Kenya over the first decade from

independence. The objectives of the Strategy were; rapid growth of trade, easing balance of

payment pressure, increased domestic control of the economy and generation of employment.

Trade Liberalization: Structural Adjustment Policies (SAPs-1980s)

The SAPs were introduce in the early 1980s to address the Structural rigidities priceinstability and macro-economic imbalances that had become embedded in the economy and led

to poor delivery of services by the public sector. The main thrust of the adjustment programme

was to effect a shift from a highly protected domestic market to a more competitive

environment that would facilitate increased use of local resources, outward oriented policies

that would promote employment creation and export expansion.

Export Oriented Policies1990s

These policies were embodied in the Sixth Development Plan (1989-1993) which provided

a policy framework for adoption of export promotion strategy centered on creation of an

enabling environment for export growth. This was to be achieved through institutional reform,

reduction and restructuring of tariffs, abolition of export duties, introduction of export retention

schemes, improvement of foreign exchange and insurance regulations and the establishment of

the National Export Credit Guarantee Coorporation.


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Trade Policy Making in Kenya and Main responsibility

The Office of the Deputy Prime Minister and Ministry of Trade takes the lead role in trade

policy making process in the country. For instance, the National Export Strategy (NES) and

the Private Sector Development Strategy (PSDS0, the two trade policy documents demanded by

Economic Recovery Strategy for Wealth and Employment Creation (ERS) were accordingly

formulated in the Office of the Deputy Prime Minister and Ministry of Trade. The two

documents identifies strategic sectors and set out a road map that would help the country build a

strong and thriving private sector in Kenya.

Trade Policy Announcement

Goal 1:Improving Kenyas business environment;

Goal 2: Accelerating institutional transformation within the public sector;

Goal 3: Facilitating growth through greater expansion of trade;

Goal 4: Improving the productivity of enterprises; and

Goal 5: Supporting entrepreneurship and indigenous enterprise development.

The formulation of the draft trade policy document which is about to be finalized is being

supported and funded Goal 3.

Conclusion

Since independence Kenya has never had a clear and well structured trade policy document.

The trade policies as contained in various government documents makes it cumbersome to

interpret them and also difficult to be understood by the outside world. This in turn has had an

adverse effect on investment. Every effort has now been made and the first trade policy

document is expected to be rolled out by early next year.


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Partial submission of Global country study (2830003)

Semster-3


College Code: 789

College code: Christ Institute Of Management

Faculty Guide: Prof. Megha Mody

PRESENT TRADE RELATION AND BUSINESS VOLUME WITH DIFFERENT

PRODUCT WITH INDIA.


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PRESENT TRADE RELATION AND BUSINESS VOLUME WITH DIFFERENT

PRODUCT WITH INDIA.

The East African coast and the west coast of India have long been linked by voyages ofmerchants. India was among the first countries to establish an office in Kenya. The Indian

Diaspora in Kenya has contributed actively to Kenyas progress. Many Kenyan have studied in

India. In recent times, there is a growing trade (US$ 1.5 billion in 2010) and investment

partnership. Indian firms have invested in telecommunications, petrochemicals and chemicals,

floriculture, etc. and Indian firms have executed engineering contracts in the power and other

sectors.

An India-Kenya Trade Agreement was signed in 1981, under which both countries

accorded Most Favoured Nation status to each other. The India-Kenya Joint Trade Committee

(JTC) was set up at Ministerial level in 1983 as a follow-up to the Agreement.

Review of Bilateral Trade:

Both sides reviewed the developments in their bilateral trade and noted that the volume

of bilateral trade has shown remarkable growth since 2005-06. Bilateral Trade has grown from

US $ 625 million in the year 2005-06 to US $ 1,530 million in 2009-10, registering a growth of

145 % in the last 4 years. Indias exports to Kenya have increased from US $ 576 million in

2005 - 2006 to US $ 1,452 million in 2009- 2010. Similarly, Indias imports fromKenya also

rose from US $ 48 million in 2005 -06 to US $ 792009- 2010. There is tremendous potential

for further diversifying and million in expanding the bilateral trade between both countries.

Trade in the field of Power & Energy

There is a huge potential for development of Power Sector in Kenya and Bharat HeavyElectricals Ltd. (BHEL) would like to reiterate its interest in getting associated in Power

Development Plan of Kenya.

BHEL is willing to explore the possibility of setting up of a Power Transformers

manufacturing Plant in Joint Venture mode with Govt. of Kenya. Ministry of Energy, Kenya is

requested to provide the estimated requirement of Power Transformers in Kenya as well as in

neighbouring countries, EAC/COMESA in next 20-25 years along with proposed

guidelines/incentives for the plant so that BHEL can consider the same.


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The tabulation below shows the trend in Kenyas total trade with India

Trade between India And Kenya

Trade between India and Kenya is likely to rise by 20-25 percent this year after growing

23 percent in 2010.Turnover between the two was worth $1.41 billion in 2010, heavily titled in

India's favor.Kenya exported commodities worth $107.1 million and imported $1.3 billion

worth of Indian goods. The figures do not reflect services.

India exports a wide variety of goods such as vehicles, motorbikes and pharmaceutical

products to Kenya, while the east African country exports mainly soda ash, mined by the Indian

conglomerate Tata Group.Other Indian companies with operations in Kenya are Bharti Airtel,

Essar Group, which has an equity interest in the country's sole refinery and the smallest mobile

phone operator that trades as yu.

India's Exim Bank has extended a $61.6 million loan to Kenya for the expansion and

repair of the national electricity transmission network. Tripathi said he saw investment

potential in the healthcare, education and tourism sectors for Indians interested in the African

nation. India offers 101 fully funded scholarships for Kenyans annually to train in technical

skills in sectors such as ICT, engineering, forestry, and the commissioner said his government

had added 25 more for training in agriculture.

PartialSubmissionofGlobalCountryStudy(2830003)Semster-3

Details Year 2006 Year 2007 Year 2008

Kenyas Total Trade with India 0.572 0.927 1.419

India's %age Share in Kenyas Total Trade 5.33 7.09 7.67

%age Growth Over Previous Year 49.35 62.06 53.07

Kenyas Total Imports from India 0.52 0.84 1.32

India's %age Share in Kenyas TotalImports 7.19 9.34 10.33

%age Growth Over Previous Year 57.58 61.54 57.14

Kenyas Total Exports to India 0.05 0.08 0.09

India's %age Share in Kenyas Total Exports 1.49 2.13 1.73

%age Growth Over Previous Year -1.88 67.31 13.79


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CountrySelected:Kenya

CollegeCode:789

CollegeCode:Christ Institute of Management

Faculty Guide: MiteshDadhania


PESTLE ANALYSIS


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PESTLE ANALYSIS

PESTLE is an analytical tool which considers external factor sand helps you to think about their

impacts. It is a useful tool for understanding the big pictureof then vironmentin which you

are operating .By understanding your environment, you can take advantage of the opportunitiesand minimize the threats. This provides the context within which more detailed planning can

take place to take full advantageoftheopportunities that present themselves.

The factors in PESTLEAnalysis:

Political:

Government type and stability Freedom ofthepress, ruleoflaw and levels ofbureaucracyand corruption

Regulation and de-regulation trends Social and employment legislation Taxpolicy,and trade andtariff controls Environmental and consumer-protection legislation

Economic:

Stageofabusiness cycle Current and projected economicgrowth, inflation and interest rates Unemploymentand supplyoflabor,Laborcosts Levels ofdisposableincome and incomedistribution

Likelyimpact oftechnological orotherchanges on the economy Likelychanges in theeconomic environment

Sociological:

Cultural aspects, health consciousness, population growth rate,agedistribution, Organizational culture, attitudes to work, management style, staff attitudes Education, occupations, earningcapacity, livingstandards Mediaviews, lawchanges affectingsocial factors,trends, advertisements, publicity Demographics: age,gender, race, familysize

Technological: Maturity oftechnology,competingtechnologicaldevelopments,researchfunding,

technologylegislation, new discoveries

Information technology,internet, global and localcommunications Technology access, licensing, patents, potential innovation, replacement

technology/solutions,inventions,research,intellectualproperty issues,advancesin

manufacturing

Transportation,energyuses/sources/fuels,associated/dependenttechnologies,ratesof

obsolescence, wasteremoval/recycling


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Legal:

Current homemarket legislation, futurelegislation European/international legislation Regulatorybodies and processes Environmental regulations, employment law,consumerprotection Industry-specific regulations, competitive regulations

Environmental:

Ecological environmental issues, environmental regulations customervalues, marketvalues, stakeholder/ investorvalues management style, staffattitudes, organizational culture, staff engagement

Kenyan Culture Overview:

Official Name RepublicofKenya

Head ofState MwaiKibaki

Population 40 million*

OfficialLanguages English, Kiswahili

Currency KeyanShilling

Capital City Nairobi


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SUMMARY OF GLOBAL/COUNTRY STUDY

AUTOMOBILE SECTOR OF KENYA WITH REFERENCE TO KENYA

VEHICLES MANUFACTURES LIMITED

Gross Domestic Product (GDP)

5 years ago nation Kenyas GROSS DOMESTIC PRODUCT had been going to

US$17. 39 billion dollars. For each household Low Household Item (GDP) typical

fairly a lot more than US$450 yearly. Within the buying energy parity conditions, for

each household associated with GROSS DOMESTIC PRODUCT back in 2006 had

been going to US$1, two hundred. The actual countrys actual GROSS DOMESTIC

PRODUCT development indexed towards the second . three percent at the begining

of yr 04 and also to almost six %in the entire year 2006 as well as 2006, in contrast

to the slow one four percent back in the year 2003 as well as all through Leader

Daniel Arap Mois final phrase regarding yr 19972002. Actual Low Household Item

(GDP) is actually likely to still the actual enhance, mostly due to the growth within the

tourist, telecoms, transportation, as well as building as well as recuperation within

the farming. The nation Kenya Main Financial institution prediction from the yr 3

years ago is actually among 6 to 7 percent Low Household Item development.


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Introduction of Automobile Industry of Kenya

The car business in the unitedstates Kenya is principally active in the store as wellas submission associated with automobiles. A few many car sellers within the nation

Kenya, most abundant in a fact becoming Cooper Electric motor Company, Toyota

(East Africa), Common Engines, DT Dobie as well as Simba Colt. Addititionally there

is 3 automobile set up flower in the united states Kenya, that focuses on the actual

collecting associated with pick ups as well as weighty industrial automobiles.

The actual set up sellers encounter difficult competitors through brought in second-

hand automobile, primarily through the nation The japanese as well as Usa ArabicEmirates. These types of imports accounts from the about 70 percent from the

marketplace. The final yr see a substantial reject within the amount of brand new

automobiles market in the united states. There have been a continuing recuperation

within the last four many years, however the figures achieve nevertheless drop much

lacking the actual figures documented last year. 7 years ago, the key car businesses

are documented product sales associated with about nine, 979 models. Whilst 27%

more than previous yr, this really is nevertheless powerful amounts accomplish

within the earlier yr 1990s.

The actual recession within the amount of brand new vehicles market is actually

attributable the actual exceptional competitors through second-hand automobiles

and also the lower financial environment.

The nation Kenya Electric motor Business Organization (KMI), the actual use

outsourcing for kind of the organization individuals within the electric motor business,

continues to be reception challenging invert for this tendency. A few of the steps

possess assisted the pass though the lower justification in the entire year 2150,

whenever just five, 869 models had been offered. On the component, the businesses

have grown to be much more innovative within react to client specifications.


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Company Profile

INCORPORATION

Incorporated in the Country Kenya as Leyland Kenya Limited on the date of 2nd July

1974.

Through a Special Resolution of the Shareholders of the Company changed itsname on the date of 16 th May, 1989 to Kenya Vehicle Manufacturers Limited.

SHAREHOLDING

Kenya Government 35%

CMC Holdings Limited 32.5%

D.T.Dobie & Co (K) Ltd 32.5%

FIRST

KVM was one of the first vehicle assembly plant to be incorporated in Kenya.

PRODUCTION

Began creation back in 1976 along with very first automobile advancing from the

manufacturing plant within the 30 days Aug, 1976. Cumulative creation because starting

appears in around sixty, 000 automobiles. The rose had been initial style to create lighting as

well as weighty industrial automobiles consist of Variety Rovers, Property Rovers, Leylandvehicles as well as Busses, Fiat, Microbuses,.

The car product range generate in the nation KVM offers improve through the years as well

as appears in eleven. The product range these days consists of Mazda, Property Rover,

Machine Collection, Mercedes as well as Iveco.


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Automobile Industry India

The Automobile Industries are producing over the 11 million vehicles and exporting

around 1.5 million every year. The dominant product of the industries is two wheeler

with a market share of the over 75% and passenger car with a market share of about

16%. Commercial vehicle and three wheeler shares about 9% of the market between

them. About 91% of the vehicle sell are used by households and only about 9% for

commercial purpose. The industries have attained a turnover of the more than USD

35 billion and provide direct and indirect employment to more than 13 million people.

Note that, with a high cost of development production facilities, limited convenienceto newer technology and towering competition, the barriers to enter the Indian

Automotive sectors are high and these barriers are learning. On the other side, India

having well-developed tax structure. The power to levy taxes and duties are

distributed among the three tiers of the Government. The cost structures of the

industries are fairly traditional, but the profitability of motor vehicle manufacturers

have been rising over the past five years. Major players, like Maruti Suzuki and Tata

Motors have material cost of about the 80% but are recording profits after tax ofabout the 6% to 11%.

The level of technology changes in the Motor vehicle Industries have been high but,

the rate of change in the technology has been average. Investment in the

technology by the producers has been soaring. System-suppliers of the integrated

works and sub-systems have become the arrangement of the day. However, further

investment in the new technology will help to the industry be more competitive. Over

the past few years, the industries have been unstable. Currently, country Indias

increasing per capita non-refundable income which is expected to rise by the 106%

and the year 2015 and growth in exports is playing a major roles in the increase and

competitiveness of the industry.

Tata Motors is leading the commercial vehicle section with a market share of the

about to 64%. Maruti Suzuki is leading the passenger vehicle part with a market

share of the 46%. Hyundai Motor India and Mahindra and Mahindra both are focus

expanding their footprint in the out of the country market. Hero Honda Motors is


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occupy over the 41% and sharing 26% of the 2 wheeler market in the country India

with Bajaj Auto. Bajaj Auto in itself is occupying about the 58% of the three wheeler

market.

Customer is very important of the survival of the Motor Vehicle manufacturing

industry. In the year 2008-09, customer response drop, this burned on the increase

in the demand of cars. Steel is the major part input used by manufacturers and the

increase in the price of steel is put a cost pressure on manufacturers and cost is

receiving transferred to the end of the customer. The price of oil and petrol affect the

driving habits of customers and the type of car they buy in the market.

The key of the success in the industries are to improve labor productivity, capital

efficiency and labor flexibility. Have an quality manpower, infrastructure

improvement, and raw material availability also play a major role. Access to most

recent and one of most efficient technologies and techniques will taken competitive

advantage to the major of the players. Utilizing manufacture plants to the best

possible level and understand the implication from the country government policies

are the basic in the Automotive Industries of the country the India.

Both, The Industry and The Indian Government are compelling to intervene for the

Indias automotive industries. The Country Indian government should to facilitate,

create approving and predictable of the business environment, infrastructure

formation, to attract investment and promote researched and development. The role

of the Industries will mainly to be in designing and to manufacture the product of

superlative quality establish cost competitiveness and to improve efficiency in labor

and in the capital. With a joint and proper effort, the Indias automotive industry will

surely emerge as the objective of alternative in the world for design and tomanufacture of automobile.


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Top Automobile companies in India

Vehicle sectors are usually prosperous in this particular one hundred year. The

indian subcontinent will be the one of many important participants inside the global

motor vehicles industry.

Bajaj Automobile Ltd:

Bajaj Automobile Ltd. will be the industry head in the vehicle organizations inside the

The indian subcontinent. The particular Bajaj Group's front runner business} will be

the Bajaj Automobile Ltd.

Hero MotoCorp Ltd:

The organization may be the consequence of the actual loan consolidation among

Japan Toyota Engines Organization} as well as India's Leading man Toyota Team

within 93.

Mahindra & Mahindra Limited:

This particular car organization} is really a part associated with Mahindra Team. The

organization focuses on automobiles for your common objective power. This rates

tenth one of the greatest personal field businesses within Indian.

Maruti Suzuki India Ltd:

Maruti Suzuki may be the organization} that has brought in trend in the market

associated with Indian native car. It does not take consequence of the actual proper

connections associated with Japan's Suzuki as well as Maruti

Tata Motors:

At first phase associated with Nodriza the referred to as Telco, Nodriza Engines is

among the biggest production organization} of economic automobile within Indian

which is additionally among the biggest personal restricted organization


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Hyundai Motor India Ltd:

Hyundai Electric motor limited is really a subwoofer label of the actual Hyundai

Engines Organization}. This is a Southern Korean language multiple nationwide

organization}.

Hindustan Motors:

Hindustan Engines is among the top producer of electrical Engines within Indian. It

does not take very first Vehicle Organization} associated with Indian that

experienced begin the actual production procedure for vehicles within Indian back in

1942.

TVS Motors

Within the 2 wheeler business TELEVISIONS Engines is quite more suitable title.

The very first 2 seater moped had been Released at this time organization} within

Indian.

Ashok Leyland:

It does not take 2nd main crucial gamer one of the industrial automobiles within

Indian. The organization companies Vestible busses, Haulage automobiles, 18-82

seater solitary as well as dual decker busses and so on The actual 6 production

models from the organization} can make seventy seven, 000 automobiles each time.


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32

Domestic Market Share for 2010-11

Passenger Vehicles 16.25

Commercial Vehicles 4.36

Three Wheelers 3.39

Two Wheelers 76.00

[Source:Society of Indian Automobile Manufacturers (SIAM)]


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Automobile Exports Trends (Number

of

Vehicles)

Category 2004-05

2005-06

2006-07 2007-08 2008-09 2009-10 2010-11

Passenge

r Vehicles

166,40

2

175,57

2

198,452 218,401 335,729 446,145 453,479

Commerci

al

Vehicles

29,940 40,600 49,537 58,994 42,625 45,009 76,297

Three

Wheelers

66,795 76,881 143,896 141,225 148,066 173,214 269,967

Two

Wheelers

366,40

7

513,16

9

619,644 819,713 1,004,17

4

1,140,05

8

1,539,590

Grand

Total

629,54

4

806,22

2

1,011,52

9

1,238,33

3

1,530,59

4

1,804,42

6

2,339,333

[Source:Society of Indian Automobile Manufacturers (SIAM)]


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Highlights of Kenyan Import - Export Policy

Aspects Impacting on Kenyas Overseas Plan:

Kenyas overseas plan offers seeing that self-reliance already been well guided as

well as curved through its very own nationwide attention. This particular self-interest

might be assembled in to 3 primary groups:

Security/Political:

Peacefulness as well as balance is really a pre-requisite in order to interpersonal as

well as financial advancement. The actual governments promise to ensure the

safety of individuals, and also the safety associated with nationwide honesty as well

as sovereignty inside safe edges underlies the need to enhance nationwide passions

through ensuring the safe politics atmosphere with regard to advancement.

Economic Advancement or Development:

Economic development has been played a dominant role in shaping Kenyas foreign

policy. Its need to pursue an open economic policy and the demand for foreigncapital and investment flows, inter-alia FDI and ODA, has been influenced Kenyas

approach to foreign policy.

Geo-Political Factors:

Kenyas overseas plan in the area continues to be formed through aspects like the

existence associated with overlapping cultural local community throughout edges

and also the undeniable fact that Kenya is really a c?te condition from the Indian

native Sea as well as that affects relationships along with landlocked neighbours.

Kenya and Regional Integration:

Worldwide as well as Local Co-operation is really a main element of the other planfrom the any kind of nation. The participates positively in a number of local


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35

endeavours. This is a person in Eastern Africa Local community, Typical

Marketplace with regard to Far eastern as well as +Development (IGAD), Indian

native Sea Edge Organization with regard to Local Co-operation, and the like.

COMESA:

Kenya continues to be connected an excellent importance towards the Typical

Marketplace with regard to Far eastern as well as The southern part of The african

continent, since it offers a excellent marketplace because of its produced item. The

actual COMESA area is really a lively financial region as well as a regular

membership towards the Totally free Industry Region (FTA) released within Oct

2150.

East African Community:

The actual rebirth associated with Eastern Africa Local community having a excellent

possible marketplace associated with 83 mil individuals who will certainly lead in the

direction of creating a competing marketplace as well as favorable atmosphere for

your circulation associated with investment decision towards the area.

Inter-Governmental Authority on Development (IGAD):

Kenya is really a person in IGAD, composed of from the 7 nations from the horn

associated with The african continent. The actual Horn associated with The african

continent is suffering from the actual perennial issue associated with drought as well

as IGAD continues to be determined powers within dealing with the problem

associated with drought as well as advancement.


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Highlights of Indian Import - Export Policy

Higher Help regarding Industry and also Product or service Variation

Technological Upgradation

EPCG Plan Dtente

Support regarding Environmentally friendly providers goods coming from Northern

Eastern side

Status Owners

Stability/ continuity in the International Buy and sell Coverage

Marine industry

Gems as well as Diamond jewelry Industry

Agriculture Industry

Leather Industry

Tea

Pharmaceutical Industry

Handloom Industry

EOUs

Thrust to be able to Value Added Producing

DEPB

Flexibility offered to be able to exporters

Waiver regarding Offers Healing, In RBI Certain Compose down

Simplification regarding Treatments

Reduction regarding Business deal Fees

Directorate regarding Buy and sell Cure Actions

DEPB Plan upto January the year of 2010.

To market benefit add-on inside our made exports and also toward this specificending, have got agreed at least 15%.

100% upload driven products for starters further 12 months right up until 31st Drive

in 2011.

The Authorities tries to market Company The indian subcontinent by means of half

a dozen or maybe more Made inside India exhibits to get structured across the

globe yearly.

Foreign Buy and sell Coverage is always to aid exporters regarding scientific wayup marche upload industry structure, Towns regarding Upload Excellence and also


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37

products positioned therein could be provided further targeted help and also offers.

To inspire generation and also upload regarding green products by means of

actions like omitted producing plan regarding environmentally friendly cars, no

obligation EPCG plan and also offers regarding exports.

E-Trade job could be integrated in a time sure fashion to deliver just about all pole

owners over a frequent program. Further ports/locations could be empowered

around the Digital Info Interchange within the next few years.

Incentive obtainable beneath Emphasis Industry Plan (FMS) have been brought up

coming from 2 . not 5% to be able to 3%.

Incentive obtainable beneath Emphasis Product or service Scheme(FPS) have

been brought up coming from 1 ) 25% to be able to 2%.

26 fresh market segments are already included beneath Emphasis Industry Plan.

Included in this are of sixteen fresh market segments inside Asian The usa and also

15 inside Asia-Oceania.

153 ITC(HS) Unique codes from several digit stage Product or service labeled

regarding Industry Associated Emphasis Product or service Plan (MLFPS)

Focus Product or service Plan profit expanded regarding upload regarding green

products; and then for exports regardingseveral goods from the particular Northern

Eastern side.

To increase exports and also inspire scientific way up marche, further Obligation

Credit rating Scrips will probably be directed at Reputation Owners @ 1% in the FOB

value of earlier exports.

Income Duty different to be able to fully EOU s and STPI products beneath

Segment 10B and also 10A regarding Taxation Behave, have been expanded for

that economic 12 months 2010-11 inside the Price range 2009-10.


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Trade Berries of import and export

International trade barriers are slowly narrowing down and a new era of world trade

is emerging global economy export and import trade will play a major role since

interdependence between economics on several aspects is increasing. But

interdependence on trade and development aid between countries is viewed with

caution by most developing countries as they believe that developed countries are

always motivated to sustain their interests and under such situation interests of

developing countries may get partly neglected. India being a developed country has

to protect its national interests of development and therefore export import trade

policy has to be designed and implemented accordingly. In the export and import

policy approach of government towards various types of exports and imports is

conveyed to different exporters and importers. Export import policy regulates exports

and imports of a country. Buying goods and services from other countries is known

as import while selling services and goods countries is known as export. Nowadays

in the globalization era, no frugality in the world can retain shortcut from the

remaining globe. In the economic development of all developing and developed

economies import and export plays an important role.

Indias foreign tradepolicy has been followed by controls and regulations on import

and export to protect domestic industry and trade. To protect domestic industry and

trade from foreign goods high import duty has been levied on imported goods and

again imports were regulated and controlled through license and import substitution

production measures (Capela, 2008). Despite all the controls and regulations and

import substitution measures Indias foreign trade deficit has been increasing and itreached at alarming heights during late 1980s when India resorted to large scale

borrowing from international financial institutions to settle trade deficit crisis.


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Potential Market for Automobiles in the Gujarat

Atul Auto Ltd., General Motors, Munjal Auto India Ltd., Asia Motor Works,

Electro herm and Ajanta are the important players in the Gujarat.

General Motors plant in Halol, Panchamahals is the major player having

production capacity of 75,000 cars p.a.

Rajkot district in the Saurashtra region has the largest group for production of

Auto components and diesel engines.

Maruti Udyog Ltd. plans to export 2.5 lakh small cars to Europe from the

MundraPort in Kutch.

Business Opportunities in Gujarat

Gujarat, Growth level with the Business Resource, offers the great opportunity for

the good Investments as it is one of the most prefer location for Industrial

Investments in the Country. It is the house for the lively industrialist and the Business

Entrepreneurs.

Several factor influence Investment opportunity in the Gujarat depends on the

Investment Environment:

Availability of Natural Resources

Manpower

Policy Measurements and Incentive

Economy Attractions

Stable Leadership and Growth Policies

Enhancing Investments

Partnering Strengths


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Conclusions

After compiling information and various data from the multiple sources we have

come to the following conclusions.

India is a favored destination for Automobile manufacturing.

Major corporations have either set shop or and in the process of setting their

manufacturing unit in India.

The most prefer destinations due to their proximity to the market, availability

of raw materials, availability of skilled labour, availability of natural resources

and favorable political and bureaucratic environment are

1) Guajarat

2) Maharastra

3) U.P

4) Karanataka

Gujarat has become an Automobile industry in the shortest time possible due

to the aggressive and big environment provided by the government to the

interested organizations.

o Prime Ex. Tata Neno Project and Maruti Suzuki

Skilled manpower easily available considering the number of engineering and

polytechnic institutes in Gujarat is around 145.

Comparative cost of hiring is lower with respect to Maharastra and Karnataka.

Rajkot and Mahesana are well known Automobile components hub.

Lots of organized units manufacturing components for global companies like

GM, Mercedes, BMW, Honda etc.

There for KVM will find Gujarat to be the best suitable partner to establish

manufacturing unit.

Sand and Dholera could be the best places because of its proximity to the

ports like mundra and kundla.


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SUMMRY OF REPORT OF REA VIPINGO Ltd(KENYA)

INTRODUCTION OF THE KENYA AGRICULTURE SECTOR AND ITS

ROLE IN KENYA ECONOMY

Agriculture is the main engine of economic growth of Kenya. Agriculture Sector

greatly impact on GDP directly by 26% and indirectly by 27% through connection

with other sectors 80% of rural employment, 60% of export earnings and 45% of

annual government revenue are gained by agriculture. Reconciliation the agricultural

sector into commercially oriented and competitive sector capable of gaining private

investment and international markets is in the process by the government. The

revitalization will also target industrial crops such as cotton, sisal, pyrethrum etc. The

agricultural sectorial has expanded remarkably to a high records, a real increasable

growth of 6.3 per cent in the year 2010 as compared to contractions of 4.1 and 2.6

per cent experienced in 2008 and 2009 respectively.

The sector expanded impressively that in 2008 and 2009 real growth was 4.1

and 2.6 percent respectively while in 2010 it was 6.3 percent.

The basically diversification due to: good atmosphere in year 2010

Interrelation through supply of subsidized seeds and fertilizers by government;

Improvement in quoting price in tea and coffee changes the production of

Maize, wheat, rice, tea, sisal and pyrethrum were among the agricultural

commodities.

Rising global demand resulted in improved prices of tea, coffee, sisal,

pyrethrum and tobacco among other crops Rising global demand resulted in

improved prices of tea, coffee, sisal, pyrethrum and tobacco among other

crops

The favorable weather leading increasing in production of milk deliveries by

26.9 per cent from 406.5 million liters in 2009 to 515.7 million liters in 2010.


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As more companies started a business of export the horticulture has fall

down. Industry like the sugar has faced significant challenges and government is

making effort to improve the sector. The governments implement their stated policies

for this industry that has growth opportunity in coming few years. There are also

other sectors where the country has important untapped resources include cotton,

forestry, fishing, pyrethrum, and macadamia nuts.

In Kenya agro-processing and packaging technologies are relatively

undeveloped. In particular, investment in packaging technology is critical during sea

freight, whose cost is significantly lower compared to that of air freight. To increase

the produce shelf life, reduce post-harvest losses, and improve consumer

acceptance both in the domestic and international markets deliberate efforts shouldbe made towards investing in this area.

Kenyan agriculture's main subsector is horticulture, the mainstay of the

country's economy, in achieving food security, income and employment generation,

foreign exchange earnings, raw material for agro-processing, and poverty alleviation.

The subsector directly and indirectly employs over six million Kenyans. After tea, the

horticulture industry is also the leading foreign exchange earner. In 2009, Kenya

earned KES 153 billion from the domestic market and

Major Agriculture based companies in Kenya:

Eaagads Ltd

Kapchorua Tea Co. Ltd

Kakuzi

Limuru Tea Co. Ltd

Rea Vipingo Plantations Ltd

Sasini Ltd

Williamson Tea Kenya Ltd


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Business, Structure and Function of REA Vipingo Ltd

With proper handling, The REA Vipingo group of companies are well based

capitalization. A largest sisal fiber producer in Africa with sisal fibre production of

over 16,000 tones per annum. All fibre produced is exported except spinning. Most

of employees are housed on the estates which have good allowances and facilities

like medical facilities etc. and group employs over 3,000 people.The REA group

exclusive REA Vipingo Plantations LTD was started in 1995. Today, however it has

expanded which it includes the company like which have Vipingo estate & 4 wholly

owned subsidiaries; Dwa Estate LTD, which owns the Dwa estate, Amboni

Plantations Limited, which also owns the Spinning Mill in Tanzania, & Wigglesworth

Exporters Limited, which also has a warehousing and shipping operation based in

Mombasa

REA Vipingo ltd listed in 1996 on the Nairobis Stock Exchange (NSE), the industry

has grown speedily from sisals yearly fibre productions of 11,000 tones to more than

16,000 tones today. Turnover has improved from Kshs. 537millions in 1996 to Kshs.

1.10 billion today.

In current years there has been wonderful demand for East African sisal fibers

from outside of world that is the traditional cordages and bag markets. Main key uses

for quality REA Vipingosisal fibers now contain extra high quality sisal carpets,

polishing applications on various cloth industries, sisal pulps is used in the producing

of specialty papers, cores for wires ropes, dartboards & various handicrafts usages.

In addition to this a reasonably big market has been found in number of various

countries for producing products including plasters reinforcements.

REA Vipingo group pays significant attention to increase and improve the

quality control at all stage of sisal processing unit, processing and creating of its sisal

fiber with the product that fibre created from REA Vipingoestates is standardized

globally for its constant high quality.

The sisal plant, which is affiliate to the Agavaceae plant family and located to

the area of regions of north and central region of America, was first introduced to

East Africa in year of 1893. The plant that was brought to Tanganyika by Dr. Hindorf,


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a German scientist, was the diversity Agava Sisalana which originates from the

Yucatan in Mexico.

The first sisal plants introduced in East Africa were planted at Kikogwe on the

area of south side of the Pangani River in Tanga region of Tanzania on the edge of

what is now the group's Mwera estate.

After a difficult begin, sisal production grow in East Africa and by the decade

of 1960s Tanzania's production alone was some about 230,000 tones annually with

a further increased in 60,000 tones being manufactured in Kenya. Most of the fibre

created in East Africa was, until the mid decade of 70s, used in the production of

lower value of agricultural baler twine.

With the arrival of synthetic fibre, and especially polypropylene, the

agricultural baler twine market diminished quickly and today virtually no African sisal

fibre produce the production of agricultural twine for the global market.

The total fibre production from Africa is currently estimated to be

approximately 59,000 tonnes per annum of which REA Vipingo'sproduction of over

16,000 tonnes

Major Imports

Description Kenya's

import

from India

in 2008

Kenya's i

mport

from

world in

2008

India's

%

share in

Global

imports

Animal, vegetable fats and oils, cleavage products, 3.29 504.62 0.65

Cereals 12.71 375.17 3.39

Sugars and sugar confectionery 10.59 110.97 9.54

Cereal, flour, starch, milk preparations and products 1.26 35.71 3.53

Beverages, spirits and vinegar 0.05 35.38 0.15


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GDP. Agriculture has its importance from the fact that it has vital supply and demand

links with the manufacturing sector.

Agriculture sector has contributed towards the production and productivity of

food grains, oilseeds, commercial crops, fruits, vegetables, food grains, poultry and

dairy during last five years. India is the second largest producer of fruits and

vegetables in the world in addition of being the largest overseas.

Indian Economy stats Kenyan Economy stats

Aid as % of GDP 0.3% 4.9%Economic freedom 1.5 1.9

Exports to US $3,233,200,000.00 $56,600,000.00

GDP $4,164,000,000,000.00 $41,480,000,000.00

GDP growth > annual % 9.23 annual % 5.81 annual %

GDP (per capita) $3,751.99 per capita $1,180.31 per capita

GDP per capita in 1950 $597.00 $947.00

GDP per capita in 1973 $853.00 $1,055.00GDP > PPP $3,362,960,000,000.00 $34,504,000,000.00

Gross National Income $477,000,000,000.00

44 times morethan Kenya

$10,657,900,000.00

Gross National Income (per

$ GDP)

$14.37 per $100 $30.73 per $100

114% morethan India

Income distribution >

Poorest 10%

3.5% 2.4%

Income distribution >

Richest 10%

33.5% 36.1%

(Source: nationmaster.com)
http://www.nationmaster.com/country/in-india/eco-economyhttp://www.nationmaster.com/country/ke-kenya/eco-economyhttp://www.nationmaster.com/graph/eco_aid_as_of_gdp-economy-aid-as-of-gdphttp://www.nationmaster.com/graph/eco_eco_fre-economy-economic-freedomhttp://www.nationmaster.com/graph/eco_exp_to_us-economy-exports-to-ushttp://www.nationmaster.com/graph/eco_gdp-economy-gdphttp://www.nationmaster.com/graph/eco_gdp_gro_ann-economy-gdp-growth-annualhttp://www.nationmaster.com/graph/eco_gdp_percap-economy-gdp-per-capitahttp://www.nationmaster.com/graph/eco_gdp_per_cap_in_195-economy-gdp-per-capita-1950http://www.nationmaster.com/graph/eco_gdp_per_cap_in_197-economy-gdp-per-capita-1973http://www.nationmaster.com/graph/eco_gdp_ppp-economy-gdp-ppphttp://www.nationmaster.com/graph/eco_gro_nat_inc-economy-gross-national-incomehttp://www.nationmaster.com/graph/eco_gro_nat_inc_pergdp-gross-national-income-per-gdphttp://www.nationmaster.com/graph/eco_gro_nat_inc_pergdp-gross-national-income-per-gdphttp://www.nationmaster.com/graph/eco_inc_dis_poo_10-economy-income-distribution-poorest-10http://www.nationmaster.com/graph/eco_inc_dis_poo_10-economy-income-distribution-poorest-10http://www.nationmaster.com/graph/eco_inc_dis_ric_10-economy-income-distribution-richest-10http://www.nationmaster.com/graph/eco_inc_dis_ric_10-economy-income-distribution-richest-10http://www.nationmaster.com/graph/eco_inc_dis_ric_10-economy-income-distribution-richest-10http://www.nationmaster.com/graph/eco_inc_dis_ric_10-economy-income-distribution-richest-10http://www.nationmaster.com/graph/eco_inc_dis_poo_10-economy-income-distribution-poorest-10http://www.nationmaster.com/graph/eco_inc_dis_poo_10-economy-income-distribution-poorest-10http://www.nationmaster.com/graph/eco_gro_nat_inc_pergdp-gross-national-income-per-gdphttp://www.nationmaster.com/graph/eco_gro_nat_inc_pergdp-gross-national-income-per-gdphttp://www.nationmaster.com/graph/eco_gro_nat_inc-economy-gross-national-incomehttp://www.nationmaster.com/graph/eco_gdp_ppp-economy-gdp-ppphttp://www.nationmaster.com/graph/eco_gdp_per_cap_in_197-economy-gdp-per-capita-1973http://www.nationmaster.com/graph/eco_gdp_per_cap_in_195-economy-gdp-per-capita-1950http://www.nationmaster.com/graph/eco_gdp_percap-economy-gdp-per-capitahttp://www.nationmaster.com/graph/eco_gdp_gro_ann-economy-gdp-growth-annualhttp://www.nationmaster.com/graph/eco_gdp-economy-gdphttp://www.nationmaster.com/graph/eco_exp_to_us-economy-exports-to-ushttp://www.nationmaster.com/graph/eco_eco_fre-economy-economic-freedomhttp://www.nationmaster.com/graph/eco_aid_as_of_gdp-economy-aid-as-of-gdphttp://www.nationmaster.com/country/ke-kenya/eco-economyhttp://www.nationmaster.com/country/in-india/eco-economy


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Present Position and Trend of Business (import / export) with India

In 1981 India-Kenya trade agreement was signed. In 1983 India-Kenya Joint

Trade Committee (JTC) was set up at Ministerial level. The JTC has met six stimes

since, the last in October 2010 in Nairobi. In 1985 A Joint Business Council was setup by the Federation of Indian Chambers of Commerce & Industry and the Kenya

National Chamber of Commerce & Industry (KNCCI). In 1996 KNCCI signed a

Memorandum of Understanding with the Confederation of Indian Industry (CII).

In 2011 Business promotion events organized in Kenya include : India:

Medical Tourism Destination 2011 organized by Services Exports Promotion Council

(SEPC) in Nairobi in March; Buyers Sellers Meet organized by the Engineering

Exports Promotion Council (EEPC) in Nairobi in April; participation by 11 Indian

companies at the Build Expo Kenya exhibition; participation of Plastics Export

Promotion Council (PLEXCONCIL) with 48 Indian exhibitors at the 4th International

Exhibition for Plastics, Rubber and Packaging Industry held in Nairobi in July;

participation of 24 Indian companies through FIEO at the 15th Kenya International

Trade Exhibition that was held in Nairobi in November. Tata Africa Holdings (Kenya)

and Mahindra & Mahindra were among the companies that participated at the Kenya

Motor Show that was held in Nairobi in September.

Trade

The mutual trade grew by 57% to reach US$ 2.4 billion in 2010-11. Nearly

US$ 2.3 billion constituted Indias exports to Kenya. India is the sixth largest trading

partner of Kenya. According to Kenyan statistics, the two sided trade for January-

November 2011 is approximately US$ 1.5 billion. Main Kenyan exports to India

include soda ash, vegetables, tea, leather and metal scrap. Main Indian exports to

Kenya include pharmaceuticals, steel products, machinery, yarn, vehicles and power

transmission equipment

.

INVESTMENT

In 2005 Tata Chemicals Ltd. acquired Magadi Soda Company Limited.

Several leading Indian public sector insurance companies participate in Ken India

Assurance Co. Ltd. More recent investments in businesses in Kenya by Indian


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corporate include Essar Energy (petroleum refining), Bharti Airtel (telecom), Reliance

Industries Ltd. (petroleum retail); Tata (Africa) (automobiles, IT, pharmaceuticals,

etc.).

Several Indian firms including KEC, Kalpataru Power Transmission Ltd.,

Kirloskar Brothers Ltd., Mahindra & Mahindra, Thermax, WIPRO, Jain Irrigation

System Ltd., Punj Lloyd, Emcure, Dr. Reddy, Cipla, Cadila, TVS and Mahindra

Satyam, etc., have a business presence in Kenya and also the Bank of India and the

Bank of Baroda. HDFC has a Representative Office. In 1981 An India-Kenya Double

Taxation Avoidance Agreement (DTAA) was signed. In November 2010 the 2nd

round of negotiations to review the DTAA was held in Nairobi.

India-Kenya to increase Bilateral Trade to $ 2.5 Billion by 2012-13

Kenya and India, the two countries have decided to increase the level of

cooperation in the spirit of South-South cooperation. In the meeting held on 14th

October, 2010 between, The Minister of Commerce and Industry, Mr. Anand

Sharma, Government of India, and Prime Minister of the Government of Kenya, Mr.

Raila Amolo Odingo, this was decided.

Namaskar Africa is an private networking forum of Included of Indian and

African enterprises provide and offering investments, trading and joint venture

business opportunities across the agriculture sectors of shared interest to both the

sides, Indias Duty Free Tariff Preference (DFTP) Scheme for Least Developed

countries (LDCs) and particular sectors of power, health and ICT.

India-East Africa Business Forum have bring jointly for a business

conversation, 12 countries of east Africa and the policy makers, financial institutions

(FI), entrepreneur, procurement institutions, multilateral funding agencies,

investment bodies, sectorial nodal institutions (NI) and regional bodies coming from

India to contribute to their learning and experience for common growth and talk

about the project specific opportunities in known sectors for mutual collaboration.


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Kenya's Top 10 products Imports from India

Description Imports from

India

in 2007

Imports

from

India in

2008

Growth

from

2008/2007

All products 844.55 1,315.47 55.76

Mineral fuels, oils, distillation

products, etc

277.55 502.89 81.19

Nuclear reactors, boilers,

machinery, etc

77.00 160.47 108.38

Pharmaceutical products 67.76 115.53 70.49

Electrical, electronic equipment 82.22 108.39 31.81

Iron and steel 49.94 70.54 41.23

Vehicles other than railway,

tramway

33.22 36.26 9.12

Plastics and articles thereof 27.37 33.31 21.66

Salt, sulphur, earth, stone, plaster,

lime and cement

9.03 20.19 123.41

Paper & paperboard, articles of

pulp, paper and board

12.01 20.17 67.90

Articles of iron or steel 14.6 19.444 33.18


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Kenya's Top 10 Products of Exports to India

Descrpition Kenya's

Exports

to India

2006

Kenya's

Exports

to India

2007

Kenya's

Exports

to India

2008

% Growth

2007/2006

% Growth

2008/2007

All products 52.22 86.73 98.87 66.08 14.01

Inorganic chemicals, precious

metal compound, isotopes

19.37 38.60 56.65 99.27 46.74

Salt, sulphur, earth, stone,

plaster, lime and cement

5.64 6.34 10.48 12.42 65.35

Coffee, tea, mate and spices 5.93 7.25 9.38 22.41 29.34

Raw hides and skins (other

than fur skins) and leather

5.58 6.03 5.71 8.01 -5.29

Edible fruit, nuts, peel of citrus

fruit, melons

1.57 0.86 3.72 -45.21 333.92

Lead and articles thereof 0.15 2.04 2.17 1,278.38 6.18

Wool, animal hair, horsehair

yarn and fabric thereof

1.73 2.33 1.88 34.93 -19.25

Vegetable textile fibers nets,

paper yarn, woven fabric

0.85 1.58 1.50 85.58 -5.12

Copper and articles thereof 1.45 0.74 1.14 -49.07 53.78

Pearls, precious stones,

metals, coins, etc

1.34 1.43 0.89 6.58 -37.45

(Source: focusafrica.gov.in)
http://focusafrica.gov.in/Angola_international_trade.htmlhttp://focusafrica.gov.in/Angola_international_trade.html


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POLICIES AND NORMS OF KENYA FOR IMPORT/EXPORT

The documents required for a typical export transaction: Commercial invoice are as

follows.

Bill of lading/Airway bill

Packing list

Certificate of origin

All necessary permits

As with imports, these documents need to be lodged together with the customs

declaration to clear the goods for export. You can engage a freight forwarder to do

the documentation on your behalf.

Value added tax:

VAT standard rate of charge is 16%. Zero rated supplies include taxable

services and export of raw materials & goods and the supply or import of specific

goods, especially for goods which used in agriculture, computer technology for

hardware and software, educational service and health , global air travel and gives to

licensed oil exploration companies.

Excluded supplies comprise of most agricultural produce in its unprocessed or

preserved state and financial services provide by banks. For supply of and power

electricity and fuel at a special rate of 12%.Prohibited and limited Exports is

described by Third agenda of the Eastern Africa customs Management Act. Waste

and scrap of ferrous cast iron, timber from any wood grown in Kenya and wood

charcoal integrated in restricted exports.

EXPORT SUBSIDIES

A Manufacturing under Bond (MUB) program that is designed to encourage

manufacturing for export is maintained by Kenya. The program is open to both local

and foreign investors. MUB goods are expected to be exported. If not, they are

subject to a surcharge of 2.5 percent and are subject to all other duties. Enterprises

are exempted from VAT and duty on imported raw materials which are operating

under this program and other imported inputs and have a 100 percent investmentallowance on plant, machinery, equipment, and buildings.


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Kenyas successful garment and apparel sector have become center of

Kenyas EPZ. Up to 20 % of their outputs on the domestic market are allowed by

EPZ firms to sell. However, they are liable for all taxes on products sold domestically

plus a 2.5 percent penalty. There is no general system of preferential financing,

although sectorial government development agencies in areas such as tourism and

tea are supposed to provide funds at below-market rates to promote investment and

exports.

Export Taxes and Charges

The EAC custom union protocol provides flexibility for member countries to

impose export taxes and charges on a selected range of products for the

development of sensitize sectors. Kenya maintains an export tax of 25%, on hides

and skins and scrap metal to encourage local processing.

Export prohibitions, restrictions, and licensing

Kenya restricted the Exportation of product like as the round wood, firearms

and ammunition of every type, and to other article having the exterior of lethalweapons. A license is necessary for exports of most agricultural and food products,


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food, minerals, and mineral products. Exports of certain agricultural products and

food products are subject to unique licenses to make sure that the country remains

self-dependents in these products.

Export of plant are focus to a phytosanitary documentation from Kenya Plant

Health Inspectorate Service (KEPHIS), while animals export and export of animal

products for necessity for a health of people and sanitary certificate from the of

Veterinary Services Department.

Export Processing Zones Scheme

The Export Processing Zones Scheme which was recognized in 1990 allows

for duty and VAT exemptions on imported machinery (except motor vehicles) andraw materials. Besides high value infrastructure, companies located in EPZs

promotes from a ten-year corporate tax, income, and maintenance tax holiday;

exclusion from stamp duties; and a 100% investment allowance (applicable over 20

years). The Export Processing Zones Authority (EPZA) main purpose is facilitating

licensing and rapid project approval and also acts as the primary licensing and

regulatory agency on behalf of the Government.

POLICIES AND NORMS OF INDIA FOR IMPORT/EXPORT

A very special Agricultural Production Scheme that known scheme called

"Vishesh Krishi Upaj Yojana which was introduce to raise and increase flowers

export, green products like vegetables, fruits, small forest manufacture & their value

added products has been introduced. Under this scheme, product s exports qualify

for duty free credit entitlement (5 per cent of Free On Board (F.O.B) total value ofexport) for import inputs and other products;

Export Promotion Capital Goods (EPCG) scheme for import of goods it is duty

free import of capital goods under, allows the producing of capital goods and

services imported under EPCG for agriculture product anywhere in the Agriculture-

Export Zone (AEZ); Utilize finances from the 'Assistance to States for e Development

of infrastructure of Exports (ASIDE) scheme' for growing and development of AEZs;


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Liberalization of import of goods, planting material, bulbs, tuber and

liberalization of the permission export of derivatives plant parts and extract to

promote export of medicinal plants & other herbal products.

Import Procedures:

Documentation: Importers must provide an import statement in the set Bill of

Entry format, revealing the value of the imported goods. This must be accompanied

by any import license and phytosanitary certificate (in the case of agricultural

commodities), along with documentation such as sales invoices and freight and

insurance certificates.

There is as such no requirement to interpret the import documents into the

regional language as English is an official language. All consignments are necessary

to be inspected previous to permission. In the current customs set-up, appointing a

clearing agent avoids delays. The authorization of imported food products at the port

of entry requires a certification from the port health authority that whether the product

is produced according to the standards and regulations of the PFA or not. However,

certification is based mostly on visual examination and proceedings of past imports,as most ports have limited testing facilities. As a result, importers of new products

can sometimes countenance delays in clearing their goods. The custom clearance

period may vary from one day to one month, depending on the product and skill of

the importer. In case of a disagreement or refusal of the delivery, the importer can

case a plea at the Customs office at the port of entry.

Import Duty on Sisal fibre

17-Mar-2012

Customs Basic Duty: 12.5%

Basic Duty Pref:

Addl Duty: 8.16%

Spl Addl Duty: 4%


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Trade barriers

There are major constraints to the greater success in export development of Kenya.

They include:

Undermine price competitiveness of exports due to poor infrastructure such

as airports, roads, high electricity tariffs, telecommunications, etc.

Harmful effects of liberalization on preset manufacturing firms in which most

firms are unable to meet up with cheap imports, particularly from South East

Asia;

Lack of adequate funding for research and promotion activities continue to

constrain many developing countries efforts to increased and competitive

export trade;

In the area of trade many deprived countries lack capacity in negotiations as a

consequence they are unable to take the advantage from bilateral and

multilateral trade arrangements.

Market entre remains challenging due to tariff and non-tariff barriers to deal

in many markets together in the developed and developing world.

Customs Clearance

Recent changes by the Kenya Revenue Authority for electronic customs

clearances have created some confusion and delays at Kenyas ports of

entry. Until the program is improved, revised, or eliminated in favor of port of

entry inspections, it will pose an added expense and administrative burden on

exporters to Kenya. Also, allegations of corruption and on-going delays in

cargo handling at the Port of Mombasa, the regions major trade hub, continueto add unnecessary costs for exporters. In response to demands from Kenyan

exporters and the Kenya Association of Manufacturers (KAM), the

government vowed to begin 24-hour, round-the-clock customs services at the

port, but is still working out the operational and budget details.


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POTENTIAL FOR IMPORT / EXPORT IN INDIA MARKET

The Export Promotion Capital Goods (EPCG) Scheme must be extended to

cover up agriculture sector as there are requirements to adopt the latest process &

product and technologies to raise productivity, industrious body Assocham said.

Other than being reliable on vagaries of monsoon, agriculture faces serious

problematic issues of food security and wastage in the supply chain. Nearly 70% of

the population is engaged and dependent on it.

The EPCG program of the Foreign Trade Policy gives permission of import of

capital goods at nil customs duty subject matters to an exports commitment to

equivalent to 6 times more than of duty saved to be rewarded in six years. This

scheme is valid till March 31.To promote and encourage Indian manufacturers

constantly upgrade their technology and provide products of global expected

standards, it is suggested that the scheme continues as a permanent element of the

Foreign Trade Policy, said Mr. Rawat in announcement to the Directorate General of

Foreign Trade (DGFT).

There is a need to increase productivity and ensure availability of essential

commodities at reasonable prices in domestic market, the chamber said."If thebenefit of zero duty EPCG is extended to stakeholders, it will help them to leverage

their strengths," Assocham Secretary General D S Rawat said.

The government had extended the zero-duty EPCG scheme by one year to

March 31, 2012. At present, the scheme covers sectors, including engineering and

electronics, textiles and handicrafts. Under it, a person can import capital goods at

zero customs duty subject matter to an exports obligation equivalent to 6 times of

duty saved to be fulfilled in six years.


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Policies and initiatives taken by Indian government for agriculture business

opportunities

The main purposes of the schemes are:

Helping the States to increase public investment in allied sector product and

agriculture sectors products.

It help to provide flexibility and self-sufficiency to the States for planning and

implementing and executing agricultural, rural and allied sector schemes. It

confirms the preparation of plans for the villages, districts and the States

based on agro-climatic conditions, ease of use of technology and natural and

environmental resources.

Ensure that the local needs or crops or priorities for better reflected. The main

objective is to achieve the target of reducing the difference in yield gaps in

important crops, during focused intercommunication.

Gujarat - Leading as Second in Green Revolution has earned a rise in

agricultural growth table at 9.6 per cent and has impressed a niche in the field area

of Agricultural Development in India. In the 2009

kenya chocolate

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