Kenyan car and hotels firm Simba Corp eyes Ethiopia
NAIROBI, July 26 (Reuters) – Kenyan new vehicles dealer and hotels operator Simba Corp. is looking to expand into neighbouring Ethiopia if the Addis government opens up the foreign exchange market, its CEO said on Thursday.
Kenyan businesses, from telecoms to banking to farming, are trying to position themselves to take advantage of a wave of political and economic liberalisation unleashed in the last three months by new Ethiopian prime minister Abiy Ahmed.
Dinesh Kotecha, the chief executive of the $100 million- annual-revenue Simba, said the firm has been closely monitoring developments in Ethiopia, which has a population of 100 million people.
“We are very open to whatever opportunities come up out there. We are willing to look at any possibility, it could be greenfield, it could be partnership with an established business in Ethiopia,” Kotecha told Reuters in an interview.
“All we wait to see is regulations to enable business environment such as liberalization, to some extent, of the foreign currency so it doesn’t restrict you in terms of going into business.”
The 50-year old firm, which started life as a second-hand car dealership and is wholly owned by local investors, sells 17 percent of new vehicles in Kenya each year through its franchises for Mitsubishi, BMW, Fuso, Renault and Mahindra.
It also owns a luxury, five start hotel in Nairobi that is managed by Kempinsiki, a tourist camp in the Maasai Mara game reserve and another local hotel brand called Acacia.
Kotecha said the group, which has three independent directors on its six-member board even though it is private, might list its shares in the next five years. He did not give more details.
Simba’s wholly owned vehicle assembly subsidiary, AVA, could double its employees from the current 300 if the government pushes through plans to encourage local manufacturing, Kotech said.
President Uhuru Kenyatta, who was sworn in for a second and final term last November, has made manufacturing one of his “Big 4” priorities due to its potential to create much needed jobs.
“The government is looking into the regulations that would favour local assembly of motor vehicles… With change in regulations, we expect motor vehicle assembly to increase,” Kotecha said.
He cited a rule requiring vehicle assemblers to source more parts locally, which is under consideration