Monthly Archives: April 2009

This fiber is exciting me…:-)

I am excited that Three Fiber cables are landing in East Africa..super!

So, all schools may be linked to fiber and we can have virtual classes (make it a plasma screen) and even connect with schools abroad..super!

But what priorities does the government have to actually use these cables and expand modernity to villages and other rural and “hard to reach places?”

Last week I spoke with Afsat(iway Africa) CEO, Salim Suleman, and he asked this one question.

“If tomorrow, you Nairobi youngling is transfered to ..say Olkejuado for a 2 year period, what are the odds that you will try to say no?”

See, urbanisation is only taking place in urban areas, and the things I like to have or experience in Nairobi for Instance, I will not find in Olkejuado. (Applebees or liddo’s don’t apply here.)

If I move out of Nairobi to work, I will want a Good Hospital, a Good school for my baby, nice mall to shop, A fantastic night life ..a real disco..and good internet connection (and the same kinda crowd as well)

So there’s more to these cables than we are looking at, apart from BPO’s cashing in on cheaper & faster bandwith..we can actually now urbanise our centres.

I am from a place called Kibomet in Kitale, our shopkeeper has always been waweru in his kiosk next to Makunga primary school.
If that cable goes as far as he is ,and the school gets linked to the world, maybe Waweru will open a cyber cafe next to his kiosk, employ one kijana to run it, the village gets the internet experience and a whole new world will then be opened to those in Kibomet.

The cyber cafe business model should now be an ISP one, seeing as the one bob a minute thing will not be sustainable. That’s an opportunity to grow entrepreneurs and maximize the potential of cable.

I am dreaming again? I hope it will come true.:-)

HOW TO MAKE MONEY IN KIBERA

IT’S PRETTY SIMPLE!

Pray to God another Migingo comes up.
If it doesnt be creative and find some other reason.

Be part of the guys who tear away the railway line.

Rift Valley Railways will “hire” you to replace the line at 500 bob per person per day.

And very importantly: Hire other people to tear the line you just laid for as little as 20 bob per person.

And the cycle goes on.

Have yourself a profitable day!

SCANNING SCANGROUP

Scan group just annouced its full year results for year ending 2008 with Profit after tax up 24%. I got to speak with the man himself Bharat Thakrar (now second biggest shareholder (20%) after getting into bed with WPP Group (27% in october).

The interview airs on CNBC Africa tomorrow.

it’s important to first note that the advertising Industry in Kenya grew by 21% in 2008.

with the Company’s current market share in East Africa at 46% the growth in the overal industry reflected well in their bottom line.

WPP Group is definately a great lay for Scangroup.The two smart Joint ventures into discplines that Scangroup has not been doing exeptionaly well in, especially PR, which contributed only 3% to the entire outfit. But This is set to change through their latest joint Venture with Hill and Knowlton, which is among the worlds top PR companies, and also part of the WPP group.Ownership, 51 percent Scangroup and 49 percent by a WPP subsidiary.

Exit Scanad PR, Enter Hill& Knowlton East Africa.

Earlier Scangroup entered another venture with Millward Brown, also a leading WPP owned market research company, now called Millward Brown East Africa Ltd.
That’s another Step into new ground.Market research has so far contributed only 3% to the scangroup table.

Bharat @ Co realise that Diversification is the name of the game, and know that in a client driven industry you can easily flex muscle using global names.

It was interesting to note that Tanzania had a 62% growth in the advertising industry owing to cash pumped in by Zain. The sector that spent most cash on advertising across East Africa is The Cellular category. Thakrar is a happy man for buying out Redsky Advertising (read Safaricom).

On acquisitiosn in Ghana and Mozambique, that’s on hold bearing the global conditions,it may be a better bargain with time. me thinks that’s a Good & expected move.

Revenue growth up 24%, Overheads were up 26%. Dividends 75cents per share.(less for WPP group 26 cents as they came in later in the year)

Focus for 2009> keep growing, using the WPP group strategic alliance to grow farther.

Compounded Annual Growth Rate from 2002 up until now, 34 %. They think the trend will continue.

The graph sure sure looks good!

Challenges: the global advertising scene may depress by about 9% this year, this likely to also affect East Africa as companies here begin to slash marketing budgets.

Share price is around 22 bob, I am told it may go lower in reflection to predictions for commercial counters.

Reflecting on fundamentals and growth of the advertising sector as Fiber cable lands,
I think it’s a good buy.

JUST ONE MORE TIME BEFORE THIS SHIP SAILS


This ship’s gotta sail my dear

I easily fell in love with the beach.
It’s sweet and almost sinful joys that have become the envied part of my life.
But this land here I cannot call home.
From the break of dawn when the sun kisses the steady waters
the orangey touches that gloss up the waiting waters

to the dusk; that’s an even sweeter sight
The reflection of the full moon with it’s glittery mystery
beckoning me to experience the waters farther away
In my search for a new home

But before this ship sails
I want to live these memories just one more time
To feel the total abandon of the breathlessness of the beach
I want to lie in the white sandy beaches and play as if there’s no tomorrow
to dance, to love to laugh as if no one’s watching

But this ships’s gotta sail.

There’s a home that just might be mine
warm soil that will welcome my wandering feet back to reality
fresh breezes that invite my searching soul
But this one time, let me experience the whispery details

Just one more time before this ship sails.

Calls, Cables & Business


I just had an interview with Nancy Bosire the CEO of Blueline Synergy, A BPO centre that’s about two years old and doing well! http://www.bluelinesynergy.com/ and this got me thinking.

I had earlier read Paul Kukubo’s blog: http://paulkukubo.com/ about his personal views on the BPO sector after the National BPO week came to an end in Nairobi, and it set me on a path i have been keen to learn more of.

There’s a lot of optimism in how far Kenya can imprint its position in the ICT space, and now with the coming of the fiber optic cable (which finally lands in June, seacom) we can begin to play fair game. South Africa and Egypt have dominated the scene but if the energy in the Kenyan sector is anything to go by, we may as well be on a good path ICT wise.

If you recall, in 2007 countless BPO’s which “call centre” driven sprung all around Nairobi. This was based on a World Bank subsidy promise that would offer fiscal support to BPO entrepreneurs. Compliance Issues and a slow release of the funds led several of these BPO’s collapse, am told now the fund is available for applicants who comply with the set standards.

Bandwidth has so far been the biggest challenge for the growth of this sector, and the Fiber optic cable will reduce costs of operation by more than half (someone mentioned that for instance if a BPO pays Ksh 400,000 per month on bandwidth, with the cable their monthly bill could be in the average of 100K). A lower cost of bandwidth and an international playing field can take you as far as your imagination goes.

Marketing will be critical for BPO’s that want to be felt, this is not a field where you make a silent entry. It’s about networking.the more people know and speak about you, the better it is for your company.The local market is keen on cutting costs, so outsourcing IT services, customer service & other business processes seems to be the way of the future. Orange (telkom) is already doing it, and after Zain’s “right sizing”, your guess is as good as mine.

It is expensive to set up a BPO centre in Nairobi, but the five blocks that Sameer Africa is constructing on Mombasa rd and our very own Silicon Valley set to set base in Athi River on (what I hear) is around 500 acres of land says a lot for the sentiment currently on the ground.

Of course there are Challenges. Stiff competition from BPO giants, political instabilty, incentives for investors and so on, there is no business that comes without risk.

If any entrepreneur is thinking of setting up in the BPO industry, the time to begin is now. The Kenyan Government is putting it’s weight behind the growth of ICT and in my opinion there is no better time to set up than now, learn from what others have burnt their fingers from, and from those that are doing it right.

BONDING WITH KENGEN…and buying kenyan:-)


I had an interesting morning today, I hate going for press events unprepared, but when I was told of a possibility of a one on one interview with Eddy Njoroge of Kengen about their forth coming bond issue, I jumped at the chance.

An infrastructure bond in these economic times is a hot topic, it’s endless possibilities and questions of viability of raising funds in the local market especially one whose corporates have in the past relied on foreign capital.

Where there is power, there is money.
Our GDP growth may be much lower than projected, and maybe even lower this year, but we continue to grow and the demand for power continues to expand, an issue that places Africa in a challenged state. So, expansion is the next best option.

The 15 billion shilling infrastructure bond is in it’s final stage and awaiting CMA approval.

But this blog is not about the Infrastructure bond.

I want to talk about what the ongoings in the securities market mean for me as a Kenyan interested in our economy.

We’re experiencing a paradigm shift in hte way we look at financing options.

After the over subscription of what the government called an *”Infrastructure bond” (rather a government bond paraded as an infrastructure bond) last month, we have seen the potential that lies in raising money locally.

The sovereign bond had to be shelved until the markets out there stabilize, and Jah knows how long that might take.That was the only option.

While that sinks in we’re cultivating an economy that believes in itself, and is ready to put it’s money where it’s mouth is.

That’s perharps the first step this country needs to stand on it’s own.

I feel that the business community is beginning to realise that you cannot ignore the local wealth anymore. We have learned that we can find Home grown solutions, and this I hope can be spread out across all sectors, including retail.

My take is that even the littlest kenyan can be part of this paradigm shift.Lets begin small, for instance When buying Coffee, Tea, food stuff, Buy Kenyan, Build Kenya.

I have made my commitment to that, and I hope you will join me. ( Sorry Nescafe!)

OUR ECONOMY AINT THAT SEXY NO MORE!


EXPORT ORIENTED ECONOMY
Our Economy has over time grown to depend on exports. Tea, Coffee, horticulture have been bringing in billions every year, and out there, people are just not drinking that much tea anymore, that coupled with heightened competition from other countries that produce the same. In brief, Kenyan specialty Tea, coffee and flowers ain’t that hot anymore!

DIASPORA REMITTANCES:
This almost became a sector on it’s own in 2007/08, and whether the cash was recorded via Money gram/western Union or sent the old darn way through friends and family coming through, it was in the millions of dollars. But Kenyans are coming back home. I read the other day that out of every 5 vacancy announcements in today, one is by a Diaspora Kenyan willing to come back home, job cuts and the American Dream have become today’s nightmare!

TOURISM
So we have the most beautiful Safari God created, guess what? So does Tanzania. Just look at how their tourism sector grew while we fought each other after the 2007 elections..” you want a safari, we will give you exactly the same as you were planning to, only more peaceful, and you even get to see Africa’s tallest mountain, why go for 2nd tallest when we have the real deal…check mate” Oh and Croatia has the most beautiful advert on CNN…why go to Africa? Message here: There is still a market out there, but we need to up our game.

WANING FOREIGN INVESTMENT
FDI’s down, no question about that.Just when we were beginning to look like the place to be for offshore investments, growing at 7%, we hit rock bottom and began from scratch, that, post poll violence and a shaky coalition,makes a killer cocktail. Rwanda is taking position to take advantage fully! And they are not to blame; they have worked hard to try a corruption free state, as they tread on the path of “from third world to first world.”

FINANCIAL MARKETS
Markets are largely driven by sentiment. He sells I sell. Fundamentals of many companies listed have been strong; this is of course based on financial results of 2008. Let’s look at the first ¼ results of 09 before I trip over this, but low demand has pushed supply so high and prices basically crashed. It did not help that before free fall, about 10% of investors at the NSE were foreigners.Lack of confidence in brokerage firms and regulatory issues are pressing, short term invetors are liquidating for other pressing issues. Simply put, it just isn’t a hot spot anymore. But bargain hunters know their game. This is when stock picking becomes an art other than a science.

CORRUPTION
High corruption equals low volumes of investment. That is self explanatory. Let’s not spoil this blog by even talk about it…please consult Google.

WHY I BLOG ABOUT KENYA, AFRICA, ME & SPICES


Memories are short, mine can be especially really short lived.
But when I put it down here, and cango back to it time after time, share it with someone else, then it brings a whole new meaning to the phrase “Keeping the memories alive.”

Grains of Masala is a journey through my days and nights, those i love and don’t really love and those I meet that leave an impact in my life. It is an escape path too, when I am not bold enough to say it in person, i send you the blog link.

That’s a perfect example of personal communication embracing technology.

Grains of Masala is also the place I unleash my anger, where I can appropriately do the bashing without the other party getting a black eye.

There have been a few changes here and mixed feelings towards this blog.

Initially I wanted it just put in my poetry and begin building a brand name for myself in teh poetry world. Then I realised my love for prose needs a home. So this journey has grown from a place where i wrote about love, and whatever (whoever) came with it, to tidbits about my experiences with people and events and current news that I come into contact with as I go about my job as a business reporter.

I love Africa, I love Kenya, and most of all I love to be part of the team that changes the way the world looks at Africa.

I since have changed my blog name from my name itself, then to “Pages of my Heart”, and finally to “Grains of Masala.”

I have been searching for for a name that is wholesome. Where I could pour the contents of my mind in a creative and assertive way that reflects the person that I am today.

Grains of Masala is my innermost thoughts about anything and everything that makes my life tick.

I love masala, I love the spices of life. That’s why I blog.

RIGHT SIZING…


Now that layoffs are coming our way, whether we blame it on the effects of the global financial crisis, or using the crisis to get away from the reality that business is not doing too well anymore, There’s one thing that’s a fact, Zain has set the ball rolling, and I am thinking there’s shivers down the spines of several employees as we head into what has been described as the third wave of the financial crisis.

If I may quote Chris Gabriel, Zain Africa’s CEO on a response he gave when asked if the same would happen to the Zain functions within the Continent. He says ” where there is value, where there is synergies, and benefits to be realised, where there is expertise then we will proceed, but where there is no expertise we will move forward in teh most expeditious and efficient manner”

This reminded me of an article on last months Harvad Biz Review that was looking at the “how to” of laying off. An interesting read that so makes so much sense for me now as Kenyan Companies begin lay off (or right size) according to Zain (Ke. EABL has followed suit, and speculation is that more are to follow.

So how do companies carry out efficient layoffs?

1) First in First Out..which of course was targets the older serving employees, with an attractive goodbye perk sometimes it is easy to let this one happen, but the emotion here cuts deep. Most importantly, What happens when an older serving employee is one of the best performing? How do you justify the lay offs?

That leads to the next option

2)Performance & targets
Those employees that have continuously not met their targets are on the firing line here. Only problem is, sometimes meeting targets takes more than just the input of the person in question, perharps the market conditions are just not condusive.Consider in this case, sales and advertising agents whose clients marketing budgets have been slashed by over half in some instances!

3) Last in, First out
This is a team that has not become part of the furniture and loosing them may not as painfull as loosing long term employees. Only thing though, some of these people could have been headhunted as top cream players in the industry.

So how about divisions within the Company that are Non performing? Do you close the divison and send home the team? What if it is the strategies in the division itself that are the problem?

So how fair can layoffs be?

My take, never.

Whether its down sizing, right sizing or dumbsizing, management of Human resource is the centre of a well performing company.

As Companies begin laying off, they must realise that their employees are the lubricant that keeps the bottom line rolling.