The recent tribulations that have hit embattled Nakumatt Supermarket have yet again shed light on the turbulence faced by poorly-managed family run businesses.
5 family-run businesses in Kenya that should be listed on the stocks market
When you don’t invite equity when the brand is strong,you'll never get an absolute peak
Once a Kenyan success story, the sudden fall of East Africa's largest retailer has been blamed on a combination of bad management, misguided expansion plans and increased competition that has seen it saddle into debts amounting to Sh18 billion, as of December 2016.
It is the story of a business that started in 1979 when a father, fresh off of the bankruptcy of another business, started a mattress store with his two sons in the Rift Valley town of Nakuru.
The store was named "Nakuru Mattresses," which was later contracted to Nakumatt and what would become one of the best known brands in East Africa.
At the height of its success, Nakumatt grossed about Ksh72.3 billion (US$700 million) in annual turnover and was seen as illustrative of the fast growing middle class driving retail sector growth in Kenya.
The Nakumatt narrative would have perhaps been different had it listed on the stock markets.In 2014, Nakumatt then valued at Sh1 trillion business, had an opportunity to list and even had announced that it would list at the Nairobi Securities Exchange (NSE).
It had also said that would sell a 25 per cent stake within the next six to 12 months to fund growth. But it never did any of these two.
And it is not a case only familiar with Nakumatt but also other family enterprises that tend to shy away from listing on the stocks market for fear of loss of clout in their firms and thus being edged out.
Business Insider SSA takes a look at some of Kenya's family-run businesses that should perhaps shed the family tag and go public on the Nairobi bourse:
- Comcraft Group
A family-run business owned by wealthy business man Manu Chandaria. Founded in 1951,Comcraft Kenya Ltd. is a $2 billion industrial behemoth that produces steel, plastics, and aluminum products in Kenya, Tanzania, Uganda, Ethiopia, and internationally. It also manufactures and markets various consumer and building products made from steel and aluminum.
- Bidco Africa
A multinational goods company in Kenya wholly owned subsidiary of Hemby Holdings Limited, a privately held investment holding company of Bhimji Depar Shah and his family. Bhimji's son, Vimal Shah serves as the Chairman.
The company,with a foothold in 16 African countries,manufactures products such as edible oils, fats, margarine, laundry bars and detergents, personal care products, and animal feeds.As of November 2014, the manufacturing conglomerate had a gross revenue in excess of US$500 million.
Another family-run business owned by seven childrenof Joram Kamau, the founder of the business who died in 2002. It is the second largest supermarket in the region after Nakumatt with the business estimated to have grossed Ksh33 billion ($390 million) in 2011.
- Ramco Group of Companies
Ramco Group, a family-owned business whose annual turnover stands at Sh23.8 billion ($230 million), is headquartered in Nairobi and has presence in Uganda, Tanzania and Rwanda. It was formed in 1940 by Rambhai Patel and started out as a hardware store before expanding its holdings into print,stainless steel and office supplies. This was upon Rambhai's three sons, Kirit,Mahendra and Chandrakt joining the business.
- Chandarana Foodplus
Kenyan supermarket chain Chandarana Foodplus,founded by the late Shantilal Mulji Thakkar.started off as a single store. However,over the last two decades the family-owned business has evolved and now has at least 10 stores in upmarket suburbs of Nairobi and Mombasa.
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