China’s Drive to Boost a Solid Presence in Kenya
The only thing that remains the same, is that things will always change. In the global market, there are more and more alliances being built that will ensure future relations and cooperation that encourages growth in all sectors of industry, long into the future. Which relations will be the most productive, in terms of building up the greatest partnerships between developing nations? A closer look at today’s budding business environment between Kenya and China reveals more than just simple trade.
In a move that perhaps signals a change of tack in the battle for control over Kenya’s consumer market, Chinese manufacturers are setting up local production plants that are being served through direct imports, that are quietly gaining a bit of foothold in Ken ya. China’s reputation for being the world’s factory and source for low-cost solutions through production models that have brought a large percentage of global trade in manufactured goods.
In the past five years, Chinese companies have established a strong local presence in Kenya, particularly in the telecommunications sector. In addition, the automotive, infrastructure, battery, food and beverage industries are also finding themselves developing fast, with help from the companies that are willing to be first to break ground in markets that require more initial outlay of manpower and investments to set the wheels in motion.
The local economy will also benefit greatly from the investments made in areas that over the full spectrum of technology and skills transfers that add a great deal of drive to Kenya’s workforce. On the other hand, Chinese companies that are finding themselves in a position to compete with well established western companies are discovering that some break-in time will be needed, in order to get up to speed and be able to meet or exceed expectations when pitted against players who have roughly 50 years of actual dominance under their belts.
The good news for these companies from China is that a large number of contracts and bids – which is growing larger every year – are being lost to the lowest bidders, who provide acceptable services for a large discount. In time, the market should stabilize, but at the present there is a heavy advantage for firms who don’t have the spending power to take on big price tags with western companies that command higher fees.
Another large growth sector is in the automotive industry, with companies like China’s Foton bracing for a fight to the finish with rivals like Mercedes, Mitsubishi, Isuzu, Nissan, and Toyota, in the area of work vehicles and industrial applications.
The growth of Chinese economic clout in Kenya has caused a bit of concern in some Western countries, with even the US ambassador to Kenya Michael Ranneberger being quoted in leaked diplomatic cables expressing resentment at growth of Chinese products in the local market that are shrinking market share of American companies like Eveready East Africa, and others that were once considered a safe place for American enterprises to grow at their own pace.























