In a landmark investment that reaffirms Tatu City’s status as Kenya’s premier hub for foreign direct investment and industrial growth, Kim-Fay, a leading East African manufacturer and distributor of hygiene, tissue, and home care products, has secured funding from the Norwegian Investment Fund for Developing Countries (Norfund) and I&M Bank. This financing will support the construction of a state-of-the-art manufacturing facility within Tatu City, a 5,000-acre mixed-use Special Economic Zone (SEZ) located near Nairobi.

Strategic Investment in Sustainability and Growth

The funding secured from Norfund and I&M Bank will primarily be used to establish a new recycled paper manufacturing plant at Tatu City. This facility, expected to be operational by 2025, will utilize locally sourced wastepaper to produce affordable tissue paper aimed at the lower-income segments of the market. Kim-Fay’s CEO, Raj Bains, emphasized the critical timing of this investment as demand for tissue and hygiene products continues to rise across Kenya and the wider East African region.

“This investment comes at a crucial time as the demand for tissue and hygiene products continues to grow in Kenya and the wider East-Africa region,” Bains said. “Our new facility at Tatu City will enable us to meet this demand more efficiently while supporting our sustainability commitment through recycled materials.”

Tatu City: A Growing Hub for Global Enterprises

Tatu City has rapidly emerged as a beacon of economic growth and industrialization in Kenya. Situated just 30 minutes from Nairobi’s Westlands area, Tatu City represents a transformative approach to urban planning and development. The SEZ is designed to provide a live, work, and play environment free from the traffic congestion and long commutes that plague many other urban centers.

With more than 80 local, regional, and global businesses either operational or under development within its boundaries, Tatu City is positioning itself as a key player in Kenya’s economic future. Some of the notable enterprises that have set up operations in Tatu City include CCI Global, Heineken, Dormans, Kärcher, Cooper K-Brands, and Twiga Foods. The SEZ offers a range of benefits to businesses, including VAT zero-rating, exemptions from import and stamp duties, and reduced corporate tax rates—10% for the first 10 years and 15% for the next decade thereafter.

David Karimi, Deputy Country Head and Head of Sales at Tatu City, highlighted the strategic importance of Kim-Fay’s investment. “We are thrilled to welcome Kim-Fay to Tatu City. This partnership not only strengthens Tatu City’s position as a premier investment destination but also aligns with our mission to foster economic growth and sustainable development.”

Supporting Local Industry and Job Creation

The partnership between Kim-Fay, Norfund, and I&M Bank is a testament to the growing focus on sustainability and local economic development in Kenya. Norfund, which has a mandate to support sustainable enterprises and create job opportunities in developing countries, sees this investment as a critical step towards achieving these goals in East Africa.

William Nyaoke, East Africa Director at Norfund, expressed his enthusiasm for the project, noting, “We are excited about this partnership with I&M Bank to finance Kim-Fay’s expansion and the development of a state-of-the-art wastepaper recycling facility at Tatu City. This project is a testament to our commitment to fostering sustainable business practices and economic growth in the region.”

The establishment of the new facility is expected to have a significant impact on the local economy. By sourcing wastepaper locally, Kim-Fay will contribute to the growth of Kenya’s recycling industry, creating new jobs and reducing the environmental impact of waste. The focus on affordability and sustainability also positions Kim-Fay to effectively meet the needs of a growing middle class in East Africa, where consumer awareness of hygiene practices is on the rise.

Kim-Fay’s Expanding Market Presence

Kim-Fay is already a major player in the East African market, manufacturing, marketing, and distributing a wide range of hygiene and personal care products. The company holds licenses to produce and distribute products for global giants like Kimberly-Clark, which is known for its Kleenex, Kotex, and Huggies brands. Additionally, Kim-Fay distributes Unilever’s Dove and Lux brands and has recently signed a distribution agreement with Dabur Limited, an Indian multinational company renowned for its Ayurvedic products.

This strategic expansion into recycled paper manufacturing at Tatu City is expected to enhance Kim-Fay’s market presence further. By leveraging local resources and advanced manufacturing techniques, the company aims to offer high-quality products at competitive prices, catering to both the middle and lower-income market segments.

The Broader Impact on Kenya’s Economy

The investment in Kim-Fay’s new facility is part of a broader trend of industrial growth and foreign direct investment in Kenya. The country’s strategic location, coupled with the government’s efforts to improve the business environment, has made it an attractive destination for investors. Tatu City, in particular, has been at the forefront of this growth, offering a unique blend of residential, commercial, and industrial spaces designed to meet the needs of modern businesses and residents alike.

As more companies like Kim-Fay establish operations in Tatu City, the economic benefits are expected to extend beyond the SEZ itself. Increased demand for locally sourced materials, such as wastepaper, will stimulate growth in related industries, while the creation of new jobs will contribute to the overall economic development of the region. Moreover, the focus on sustainability and environmental responsibility sets a positive example for other businesses in Kenya and beyond.

Looking Ahead: A Model for Sustainable Development

The partnership between Kim-Fay, Norfund, and I&M Bank is more than just a business transaction; it is a model for how sustainable development can be achieved in emerging markets. By combining financial support with a commitment to environmental stewardship and local economic development, this project represents a forward-thinking approach to business in the 21st century.

As Tatu City continues to grow and attract more investors, it is likely to play an increasingly important role in Kenya’s economic landscape. The SEZ’s unique combination of incentives, strategic location, and visionary urban planning makes it an ideal environment for businesses looking to expand in East Africa.

For Kim-Fay, the new facility at Tatu City is not just a new chapter in its business journey but also a reaffirmation of its commitment to serving the East African market with affordable, high-quality products. As the company continues to grow, it will undoubtedly contribute to the broader goals of industrialization, job creation, and sustainable development in Kenya and the region as a whole.

Conclusion

The collaboration between Kim-Fay, Norfund, and I&M Bank to establish a world-class manufacturing facility at Tatu City marks a significant milestone in Kenya’s journey towards industrial growth and sustainability. By focusing on local resources, job creation, and environmental responsibility, this project not only strengthens Kim-Fay’s position in the market but also contributes to the broader economic and social development of the region.

As Tatu City continues to develop as a hub for foreign direct investment, it serves as a model for how strategic planning, public-private partnerships, and sustainable practices can drive economic growth in emerging markets. The success of this venture will likely inspire further investments in Kenya’s industrial sector, reinforcing the country’s status as a key player in the East African economy.

photo source: Google

By: Montel Kamau

Serrari Financial Analyst

23rd August, 2024