Photo/PhiliP kamakya

12 Nairobi Star monday, 28 July 2008

BY LOLA OKULO

MANUFACTURERS and businessmen are up in arms over unreliable railway service which they say is delaying distribution of goods from the port of Mombasa.

The traders have accused Rift Valley Railways of giv-ing them a raw deal. They said even after it was an-nounced the strike that had paralysed operations at the firm had ended, the rail serv-ice was yet to normalise.

The chairman of the Kenya Association of Manufactur-ers Vimal Shah warned that the poor rail service needed to be addressed immediately because manufacturers were already suffering from in-creased costs of business as a result of high energy costs. He said more problems for the manufacturers would increase prices of basic com-modities.

“There are a lot of consign-ments that are not forthcom-ing from the port yet manu-facturers need the materials like yesterday and all the RVR management is doing is giving excuses. We met with them and they said they are waiting for finances from the IFC (International Finance Corporation,” Shah said.

The association, Shah said, had also met ministry of transport officials over the matter though nothing much had come out of it. Even the new Nairobi Star press plant is feeling the pinch of the problems facing RVR. The plant is yet to get some of the materials ordered earlier in the month and this has

been attributed to absence of regular railway service on the Nairobi-Mombasa route.

A clerk at the Maersk Transport Company told the Nairobi Star’s head of ac-counts, Shadrack Munyalo that the newsprint material ordered would delay because of the RVR strike.

However, Maersk’s trans-port manager Walter Kioko attributed the delay to a go-slow by Kenya Ports Author-ity staff and not RVR.

“RVR is bringing in goods at times but the problem is not RVR it is the go-slow by the KPA staff because I understand that they plan to go on strike on Monday (to-day),” Kioko said.

RVR’s acknowledged that the project was not running as expected but the sharehold-ers were planning to inject more money into the project to improve the services of the company. “Our shareholders

have put in a further 7 mil-lion dollars (Sh469m) in the last few weeks and we are still expecting more funding from the IFC,” RVR’s managing director Roy Puffet said.

RVR has been dogged by controversy that escalated when its workers went on strike at the beginning of this month demanding their pay for the month of June and also complaining over poor working conditions.

The MD acknowledged that the company was run-ning behind schedule but said the management was working behind the scenes to improve the situation.

“Plans that were mapped out in the agreement have not been realised yet and the project is behind on per-formance indicators but the shareholders are committed to make it work through adequate financing,” Puffet said.

diScoNteNted: RVR employees during a strike recently.

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UndeRstAnding Asset cLAss

An asset class is a group of assets that share the same basic characteristics. For example, a house in Lavington in nairobi and in Mayfair London, whilst many miles apart, belong in the real estate asset class. And frankly, if you are buying a house in nairobi, it would make sense to try and understand how it has performed versus other properties in the same asset class. Of course, my wife always reminds me, the first and foremost thing is that you do need somewhere to live.

Which brings me briefly to the point about nEEDS and WAnTS. A house is a need but many people have moved their ‘wants’ into the ‘need’ column. That’s for another column.

Let’s select some different asset classes.1. Real estate - In Kenya, most folk have a strong preference for real estate. There appears to be a strong internal Kenyan bias in regard to this asset class.2. Listed shares - nairobi Stock Exchange. Post 2002 and with the privatisations of Kengen and others, this has become a popular asset class.3. Commodities - This has become the international rising star. It has attracted more and more money and regulators are fond of blaming investment monies for pushing up the price of our basic commodities.4. Private Equity (Investing in pre-listed opportunities) - Transcentury Group is the preeminent example.5. Bonds - There is a

clear difference between holding US Treasury Bonds or Kenyan Treasury Bills.6. Currencies - You could be holding dollars or shillings, for example.

7. Alternative Investments - This is a growing asset class. For example, the highest quality clear diamonds (typically $1m and above) have been appreciating at a 67 per cent annualised clip. So you could always try persuading the man in your life that the big rock you have always coveted might well be the best investment he could make!

This is not a definitive list. It would be worthwhile looking at your savings in this way. There are times when you need to analyse your portfolio and then see whether you are best positioned; to compare what you are holding versus other assets in the same class. And to always remember, the ‘Leverage’ angle. When you take a mortgage to buy your house, you are using leverage. If house prices go up, it will magnify your returns. When things turn, you can erode your equity very quickly.

Finally, go and look at the data. Most of it is in the public domain and think about it. Your decisions will be better thought out and the net result entirely more satisfactory.

I am spending 75 per cent of the cash (post sale of Safaricom) on HF and the balance will remain in cash. I will give details next week.

Aly-Khan Satchu www.rich.co.ke is the author of Anyone Can Be Rich, available in local bookshops

Shares go up and down and readers are advised that this column represents Mr Satchu’s personal opinions.

By MAthews ndAnYi

HORTICUlTURAl crops will soon be exported directly to Europe from Eldoret.

Agriculture Minister William Ruto said the direct flights from Eldoret International Airport will begin in September. He said the government had put in place measures to ensure that all the necessary standards for exports of the crops were observed.

Ruto said he had held discussion with businessmen from parts of Europe who are interested in supporting the horticulture and floricul-

ture in the country. K-Rep Bank had also accepted to finance horticulture farmers through loans with low inter-est rates, he said.

“We want farmers to diversify instead of sticking to cereals production,” the minister said.

Ruto said the Eldoret airport was seriously underutilised and the government was putting in place measures to ensure it was useful to the farmers.

The airport

has been equipped with cold rooms which will be used to store fresh produce for ex-port. In the past, all the fresh produce from the North Rift and Western Kenya regions have been exported through Nairobi.

The Horticul-tural Crops Development Author-ity has also moved into the region to help farmers venturing into the lu-crative sector

but Ruto said farmers must be properly educated on how to go into the business.

Eldoret International Air-port was put up at a cost of Sh3.7 billion more than 10 years ago but the facility has remained largely idle with only few passenger flights connecting to Nairobi.

A committee was put in place by President Kibaki to look into ways of making the airport busy and it recom-mended that the government must help to boost farming of fresh produce for export. The airport has, however, been handling imports of textiles and electronics.

BY stAR cORResPOndent

DAIRY farmers in the country lost Sh18.64 billion during the post-election violence, according to statistics by Kenya National Dairy Producers Organisation.

Due to acute shortage of milk supply during the pe-riod, consumers were forced to pay Sh2.05 billion more after the price hike by deal-ers who could reach them.

During the crisis, farmers lost Sh13.24 million worth of dairy cows through either diseases and or theft. Milk sales and artificial insemina-tion providers lost Sh450 million and Sh24.5 million respectively. Agro-Chemicals company operators and dairy processors incurred Sh324.5 million and Sh170 million loss respectively through vandalism.

In a one day workshop at a Kericho Hotel, more than 100 leaders from South Rift region called on the govern-ment to assist the affected farmers rebuild the dairy sector as one way of revital-ising the only main source of their income.

Kenya Dairy Sector Competitive Program co-ordinator Mary Munene said the programme aimed at assisting individual groups that could establish milk sheds capable of sup-plying between 50,000 and 100,000 litres per month.

She said the five-year programme would target capacity building for small businesses and service providers.

eldoret to europe flights to begin

Dairy farms lost Sh18bn in poll crisis

aNNoUNcemeNt: Ruto