- Kaluworks, one of Kenya’s largest manufacturers of aluminium utensils and roofing sheets, has been struggling financially over the last few years on the back of weak sales and increased competition from other cookware manufacturers.
- Pongangipalli Rao
NCBA Group #ticker:NCBA has placed Kaluworks Limited, a manufacturing firm that is part of billionaire Manu Chandaria’s Comcraft Group, under receivership over non-payment of $40 million (Sh4.3 billion) debt.
The bank has appointed a receiver manager to turn around the firm or protect its assets in the race to recover the multi-billion shilling debt.
Kaluworks, one of Kenya’s largest manufacturers of aluminium utensils and roofing sheets, has been struggling financially over the last few years on the back of weak sales and increased competition from other cookware manufacturers.
NCBA has tapped receiver manager Pongangipalli Rao for the Kaluworks job in a development that marks a rare blot in the career of industrial magnate Manu Chandaria, Comcraft chairman.
“Notice is given that the above company (Kaluworks) was placed under administration on May 27, 2021 by the holder of a qualifying floating charge,” Mr Rao said in Friday’s Kenya Gazette notice.
The receivership comes months after several lenders, including I&M Bank #ticker:I&M, scrambled for auctioneers and debt collectors to auction multimillion-dollar properties, including residential and commercial complexes, which had been used to guarantee loans for Kaluworks after the firm failed to honour its obligation.
The company is said to owe another top bank $40 million (Sh4.3 billion) and hundreds of millions of shillings in a commercial paper whose repayments it has defaulted on.
John Gachora, group managing director at NCBA, declined to comment on the bankers’ plan for Kaluworks.
“Please refer all questions to the administrator,” said Mr Gachora, when contacted for comment by the Business Daily.
The company started operations as predominantly a cookware manufacturer and in 1988 diversified into aluminium rolled products by setting up a state-of-the-art aluminium rolling plant in Mariakani near Mombasa.
Among its assets are a foundry, continuous caster, cold rolling mill and “other finishing equipment.”
Kaluworks is a subsidiary of Clovis Company Limited, a Bermuda-registered investment holding company that is owned by the Comcraft Group, of which Chandaria is the chairman and controlling shareholder.
Mr Chandaria, who is also a leading Kenyan philanthropist, has previously distanced himself from Kaluworks operations.
Bankers say Kaluworks links to Chandaria gave them additional comfort to offer the pots and pans manufacturer multibillion-shilling debt.
Information on its website shows that Kaluworks Limited was set up in 1929.
Chandaria’s father, an Indian immigrant, laid the earliest foundation of the Comcraft Group in 1915 when he relocated to Nairobi to start a provisions shop in Nairobi’s Biashara street.
As the business grew, his father and extended family members subsequently acquired Kaluworks.
When Chandaria returned to Kenya after studying in the United States, he joined the company, expanded the group’s product offering and steered the company to its remarkable growth.
Comcraft is now spread in more than 40 countries and US business magazine Forbes in 2011 estimated Comcraft to be worth $2.5 billion (Sh215.6 billion), the last time it valued the business.
In 2011, Mr Chandaria made it to the Forbes 40 Richest Africans list, and one of Kenya’s wealthiest businessmen.
In 2012, Kaluworks raised $14 million (Sh1.5 billion) in a corporate bond sale.
Sanlam Kenya #ticker:SLAM listed Kaluworks as one of the defaulters of a commercial paper it invested in.
Sanlam had to write off Sh1.15 billion mainly related to investments in firms that fell into financial distress.
“For Kaluworks, who thought that Manu Chandaria could default on a commercial paper?” asked Sanlam Kenya group chief executive Patrick Tumbo earlier.
The family-owned conglomerate Comcraft Group had ambitions of taking parts of the business public, reflecting its growing size and need for capital as it expands internationally.
Mr Chandaria earlier said that some sections of the business could merge ahead of the initial public offering, which could be one of Kenya’s biggest if the Chandaria family decide to list on the Nairobi bourse.
The lenders’ action on Kaluworks comes as banks that had gone slow on property seizures last year following the Covid-19 pandemic have stepped up debt recovery efforts to clean up their loan books, leading to a spike in auctions.
The Central Bank of Kenya (CBK) says the defaulted loans are mainly in the real estate, agriculture and manufacturing sectors besides those listed as personal and household.
But Kaluworks was struggling long before the Covid-19 outbreak, which triggered layoffs and firm closures.
KQ resumes Mumbai flights after 4 months
- Kenya Airways will on Thursday resume flights to Mumbai, ending a four-month hiatus that was occasioned by increased cases of Covid-19 in the Asian state.
- The airline in a notice to its customers yesterday said it will resume its operations on the route on September 16, 2021 with the first flight departing Jomo Kenyatta International Airport at 7am to arrive in Mumbai at 3:45 pm.
Kenya Airways #ticker:KQ will on Thursday resume flights to Mumbai, ending a four-month hiatus that was occasioned by increased cases of Covid-19 in the Asian state.
The airline in a notice to its customers Monday said it will resume its operations on the route on September 16, 2021 with the first flight departing Jomo Kenyatta International Airport at 7am to arrive in Mumbai at 3:45 pm.
The airline will then resume full operations on the route on September 20, flying three times per week on the Indian route, which is one of the most lucrative destinations on its network.
Passengers on the route will part with Sh46,000 ($419) for one-way air ticket on economy class seats from Nairobi to Mumbai- prices that are relatively the same compared to what it was charging before the Covid-19 pandemic.
“Welcome back onboard! Fly from Nairobi to Mumbai starting Thursday 16th September with normal schedules resuming from Monday 20th September 2021,” said the airline in a notice to its customers yesterday.
KQ Suspended passenger flights to and from Mumbai on April 30 until further notice, following a government directive on travel between India and Kenya due to a Covid-19 crisis in that country.
The airline said on Friday that passengers who had booked tickets after May 1, the date of the last flight from Mumbai to Nairobi, will have to change their plans.
Affected passengers, KQ said, could also take vouchers for the value of their fare for future travel within 12 months.
India has seen soaring infection rates in the recent days, since the discovery of a new virus variant. Last month, India put on lockdown one of the states following a spike in cases of Covid-19.
Other countries that have banned flights to India include France, the UK Bangladesh, Oman and Hong Kong that have banned travel to and from India or asked their nationals coming from the Asian country to isolate themselves in government-approved hotels.
India has so far detected 33,264,175 corona virus cases with the number of deaths hitting 442,874 as at September 13.
A large number of patients from Kenya also travel to India every year for specialised medical treatment, especially cancer care, helping to drive medical tourism in the densely populated country that boasts affordable and easily accessible healthcare.
Lower import volumes push mitumba prices to new highs
- Traders paid Sh100,527 on average per tonne of the used clothes, popularly called mitumba, compared to Sh96,286 the previous year.
- Kenya Bureau of Standards (Kebs) banned importation of the clothes from late March through mid-August in a bid to contain the spread of the life-threatening coronavirus infections.
- Findings of the Economic Survey 2021 suggests dealers shipped in 121,778 tonnes of mitumba in 2020, a 34.02 percent fall compared with 2019 and the lowest volumes since 2015.
The average price of a tonne of second-hand clothing items imported into the country crossed the Sh100,000 mark for the first time last year on reduced volumes in the wake of safety protocols and guidelines to curb spread of coronavirus.
Last year’s drop was the first dip since 2011 when 76,533 tonnes were shipped in compared with 80,423 tonnes the previous year, the official data collated by the Kenya National Bureau of Statistics (KNBS) shows.
The import bill for the merchandise amounted to Sh12.24 billion, a drop of 31.11 percent, or Sh5.53 billion, year-on-year.
TIn imposing the temporary ban on used clothes, Kebs had applied a standard which prohibits buying second-hand clothes from countries experiencing epidemics to ensure disease-causing microorganisms are not imported into Kenya.
Higher quality and relatively lower prices for mitumba has continued to drive demand for used clothes at expense of locally-made products amid higher margins enjoyed by traders largely operating in informal markets.
The lucrative second-hand clothing market has seen traders from China —a key source market for the merchandise —open shops in Gikomba, Kenya’s largest informal market for mitumba, in recent years to cash in rising demand.
Earnings from exports of articles of apparel and clothing accessories fell 5.32 percent to Sh32.92 billion last year compared with 2019, data indicates.
Court backs Atwoli union in horticulture membership feud
- A trade union that is led by the long-serving Central Organisation of Trade Unions (Cotu) boss Francis Atwoli has survived an attempt to stop it from representing over 60,000 workers in the horticulture industry.
- Newly registered Kenya Export, Floriculture, Horticulture, and Allied Workers Union (Kefhau) had filed as a case in the Employment and Labour seeking to bar the Atwoli-led Kenya Plantation and Agricultural Workers Union (KPAWU) from representing workers in the industry.
Mr Atwoli is the secretary-general of KPAWU. The rival union claimed KPAWU had encroached on its area of workers’ representation.
Justice James Rika, however, dismissed the claim and ruled that the dispute should have been taken through conciliation, and was therefore presented in court prematurely.
He also stated that Kefhau must go beyond its registration and recruit sufficient members from the employers, to be granted recognition and organisational rights.
“Registration on its own, does not afford the claimant (Kefhau) recognition. Until there is proof that Kefhau has satisfied Section 54 of the Labour Relations Act, the status quo must be maintained,” said the judge.
“Kefhau must recruit at least 50 percent plus one, of the unionisable employees in the floriculture and horticulture industry, members of the Agricultural Employers Association to be considered for recognition,” he stated.
He noted that there is a Recognition Agreement and CBA, binding Mr Atwoli’s union and Agricultural Employers Association, affecting 73 Flower Growers Group of employers, and over 60,000 employees.
“It is objectionable for Kefhau to be allowed organisational rights, and the legitimacy to receive trade union dues and agency fees, from over 60,000 employees, just on the strength of registration as a trade union,” said the judge.
Kefhau wanted the court to declare that it is the sole trade union, which is allowed by its constitution to carry out activities in the export floriculture and vegetable industry, and an order restraining Mr Atwoli’s from representing workers in that area.