Thursday, July 3, 2014

Success in Australia helps investor see IT potential back home

By JOSHUA MASINDE
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One of the most difficult decisions that Ahmed Yusuf has ever had to make was to leave Kenya with his family in 1998 and head to Australia to start a new life.

Life in Kenya then was uncertain and the business environment difficult. The Kakamega-born Yusuf had worked for various local and international firms in Nairobi.

A company he was working for during the reign of then president Daniel arap Moi closed shop due to dwindling business.

Kenya then was a good example of what The Economist magazine termed “The Hopeless Continent” in 2000.

However, 16 years later, the Kenyan-born Australia-based businessman could not resist the temptation to come back home to exploit the opportunities in Kenya and in much of the continent that The Economist would later in 2011 refer to as “The Hopeful Continent”.

STOPPED WORKING

“I went to Australia because I wanted a change of scene for my family. Security was a problem, corruption was at its height, and things were really bad in Kenya.

“Even when I was in Australia, the reports I received up until 2002 were disappointing,” he said during an interview.

Yusuf established several businesses that he now says are worth at least $10 million (Sh870 million). 

He has been in business since 2010, when he stopped working as a general manager for a firm in Australia.

The businesses he established range from a college that offers courses in building and construction from certificate level to advanced diploma and an early childhood enterprise that assists working or at-school parents who may be working or studying full-time to care for their children from the time they are born to the time they start school.

He also started a technology firm specialising in software development for firms back in Australia.

He is now exploring prospects of extending his business to Kenya and other parts of Africa, where he sees a lot of potential for growth.

AUTOMATE REVENUE COLLECTION

“We have a range of businesses that operate in Australia. The first one is a college that trains people building and construction from certificate level to advanced diploma.

“Often, people who come to the college hope to get a certificate or licence to become builders. In Australia, you cannot build a house until you get a licence,” Yusuf said. 

The technology firm, Plycode, is a custom software company that offers services and systems to companies seeking to automate their revenue collection, accounting, or car tracking software.

Currently, Yusuf is exploring partnerships with young technology companies in Eastern Africa for purposes of engaging their respective strengths to deliver outsourcing services to firms abroad or within the region.

KONZA CITY

The partnership with local companies would entail collaboration in the development of information technology projects depending on the respective strengths of the individuals or firms involved.

In Australia, he also runs an ICT recruitment board, Kazileo, for IT jobs in Australia.

“Within a year, we are going to introduce it to Canada, the UK, New Zealand, Malaysia, and Singapore. We have introduced another one for Africa, Employfy, a database for job seekers and employers,” he said.

With blue-chip firms like Toyota and non-profit organisations in their portfolio, Plycode has also built revenue collection systems for firms in Australia.

Yusuf believes that Kenya now has the desire to grow and achieve a lot more for its population and that IT is one of the areas that will help drive the economy forward.

There are many opportunities to be exploited, especially on the ICT front as many things in the country are still manual.

“If Konza City becomes a reality, there will be more business outsourcing in ICT firms and opportunities coming here,” he said, adding that opportunities in the IT sector lie in automating accounting systems and discarding the old manual ones.

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Thursday, July 3, 2014

Sh200 treat blooms into lucrative venture

Mr Norman Kuria at his stall that he started after being released from jail. Photo | SULEIMAN MBATIAH

Mr Norman Kuria at his stall that he started after being released from jail. Photo | SULEIMAN MBATIAH 

By CHEBET CAROLINE
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After he was released from jail and without a cent, Norman Kuria bumped into a friend who gave him Sh200 for a meal.

In 10 years, Kuria had turned the Sh200 into a multi-million shilling project.

Kuria invested the money in a few pairs of socks, which he hawked in Nakuru town.

The business has now expanded to property such as land, houses, and car firms. “It was still early in the day when I was released. I was confused since I did not have even a shilling.

A long-time friend offered me Sh200 to buy lunch. I quickly approached a hawker to introduce me to the business,” Kuria told Money.

His aim was to make a little more money to pay for his lunch and fare back to his parents’ home.

GOING BACK HOME

The hawker led him to a wholesale kiosk where he bought a dozen pairs of socks at Sh190. He headed to the busy bus terminus where he started hawking the socks.

“In half an hour I had exhausted my stock. With the profit, I bought one-and-a-half dozen socks, which I also exhausted. I even lost interest in going back home, where I had nothing. I wanted to focus on making a living,” said Kuria.

Within a week, he had upgraded his stock to include undergarments and handkerchiefs, making a net profit of Sh10,000.

His aggressiveness in business and new perspective of life saw him rent a house for the first time.

This, he said, came after spending cold nights in hotels and streets for about a week.

WAS ON CRUTCHES

A month later, Kuria had expanded his business to include watches, phone covers, and spoons, which saw him earning a tidy profit of over Sh50,000.

A few years later, however, Kuria was involved in a road accident on his way home, injuring his leg. For a while, he was on crutches.

“But this did not stop me from doing my work. I rented some space in town where I could operate as my leg healed,” he recalled.

Gradually, Kuria’s business expanded. In 2007, he managed to buy a piece of land and a taxi.

Besides paying school fees for his four children in secondary and primary school, he has managed to buy another piece of land and a motorbike.

He has also opened a rabbit and chicken business for his wife. “Through her business, my wife is able to invest in other family projects,” he said.

UNTAPPED OPPORTUNITIES

His developed plots within the suburbs of Nakuru town are worth over Sh5 million. His other businesses have also grown over the years.

According to Kuria, the obsession with white-collar jobs among the youth needs to be addressed.

“The youth should not just fight for jobs in big offices; they should open their minds and start businesses of their own. In turn, they will employ others,” Kuria said.

He has, however, engaged many youths from Nakuru County in his businesses, giving them ideas on how to utilise their untapped opportunities.

“There are many business ideas. The youth should be aggressive in taking advantage of them,” he said. Kuria now wants to open a wholesale market and expand his businesses in Nakuru.

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Wednesday, July 2, 2014

Karen eco-friendly mall sets new standards for developers

The Galleria Mall in Karen.

The Galleria Mall in Karen. The Hub is a new mall which, once completed towards the end of 2015, will feature six separate buildings connected by open-air walkways with retail and office spaces, a medical facility, a fitness centre, restaurants, cafés and even a lake in its grounds.   Photo | FILE

By JAN FOX

Karen has long been recognised as one of Nairobi’s greener areas, with its abundance of indigenous trees and proximity to both the Ngong Road Forest and the Nairobi National Park.

Over the last few years, however, the leafy suburb has become a hotspot for developers seeking high returns from commercial and residential buildings, a construction boom that is threatening to damage the environment.

There is one developer, though, that has recognised this risk, and is determined to sustain Karen’s natural charm.

The Hub is the new mall which, once completed towards the end of 2015, will feature six separate buildings connected by open-air walkways with retail and office spaces, a medical facility, a fitness centre, restaurants, cafés and even a lake in its grounds.

The second phase will see the addition of a hotel and a conference centre.

CLICK HERE to read the full story in the Business Daily.

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Wednesday, July 2, 2014

Talented youths feted at new Rising Star awards

By Annie Njanja
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The inaugural Rising Star Awards aimed at recognising local talent was held last Tuesday.

The event, organised by BlackBark Productions and which will be held annually, is designed to appreciate entrepreneurs and other professionals who have made remarkable efforts in growing both the private and public sector.

The awards, which appreciate individuals under the age of 40, will raise awareness on available local talent, trigger competition among youths, and draw young entrepreneurs and other professionals together to network.

“Many talented individuals often go unnoticed as they either have not been given the opportunity to showcase their skills or demonstrate their capabilities.

CLICK HERE to read the full story in the Business Daily.

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Monday, June 30, 2014

How brothers turned textile firm into multi-billion shilling bakery

From left: Keblest Limited directors Mayur Shah, Anju Shah and Jinit Shah at the company's factory in Thika. MARTIN MUKANGU 

By SIMON CIURI
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When media reports early this year revealed that baking firm Kenblest Limited was negotiating a Sh1 billion loan with KCB to finance expansion of its Thika-based operation, keen followers of Kenya’s dynamic business scene took in the news with some degree of disbelief.

As far as brand recognition goes, Kenblest is arguably among Kenya’s top – its popular bread (of the same name) having landed on nearly 80 per cent of the country’s breakfast tables. But then again it is just bread – one of the simplest consumer goods to make and the entry bar is not so high.

Yet the bread maker says growth has been steady in tandem with the continuing expansion of the middle class as well as the general population.

Anju Shah, one of the directors, says Kenblest plans to invest the money in its wheat and maize milling plant, raising its production capacity to 300 metric tonnes per day up from the current 200 metric tonnes.

The investment is also expected to generate 200 more jobs in addition to the 700 people already employed. At Kenblest’s base, the three brothers in charge of the operation have kept a modest demeanour about their entrepreneurial achievements.

“Out there it is not possible to really see what is behind these outcomes,” says Anju, the eldest of the trio that runs the business.

This is the product of a successful business succession in a company that was founded nearly eight decades ago when Kanji Ladha Shah established a textiles and general goods outfit targeting the small Indian population that operated clothing stores in Thika.

Located in one of the then little known corners of Thika, Shah Kanji Ladha Company has since walked through a series of transformations and management transitions to become one of Kenya’s most profitable companies with an annual turnover of Sh2.5 billion.

The series of transformations began in earnest in 1962 with the passing away of Kanji Ladha Shah who had long mentored his cousin, Hemraj Sura Shah, to take charge of the business.

As fate would have it, Hemraj also passed on two years later leaving the company in the hands of Mohanlal Dharamshi Shah, who had joined the business in 1950.
Dharamshi , now aged 83, is the chairman of Kenblest Limited – a company he runs with his three sons.

“It was under my father’s tenure as managing director that the business grew by the largest margin and diversified into many areas including food supplies,” said Mayur, another of the brothers. It was the diversification drive that in 1968 gave birth to Thika Household Suppliers – a manufacturing firm that supplied mainly foodstuff to government agencies, schools and hospitals.

Dharamshi introduced Anju, Jinit and Mayur to the supplies business in the 1960s , but only after they showed an interest in pursuing business as a lifetime career.

“He enrolled us in local primary and secondary schools so that we could join him in business and learn the ropes after school. We all attended Gatumaini Primary School in Makongeni, Thika, and later proceeded to Chania and Thika High Schools,” said Jinit.

Anju was the first of the trio to join the business in 1974 when it primarily dealt in corporate supplies. Four years later, Jinit joined after finishing college. Mayur was the last to get on board in 1981 after finishing a diploma in baking course. 

Thika Household Suppliers later opened a subsidiary, Anjim Fabrics, on Nairobi’s Biashara Street that dealt in bedsheets, blankets and khangas.

“Years of experience and a strong  field presence gave us a clear picture of the emerging market trends that convinced us it was time to enter the baking market,” said Mayur.

In 1982, the eating habits of most Kenyans had started to change as the migration to urban areas intensified. The Shahs decided it was time to introduce a breakfast pack for the newly urbanised – a decision that would see the formation of a bakery division, Kenblest, and spur the company’s growth in the next three decades.

Kenblest initially produced 80,000 loaves per day, but that grew almost three-fold to 230,000 in just four years creating a packaging crisis that was only resolved 12 years later with the establishment of Nav Plastics – a subsidiary that dealt in plastic extrusion and bags.

“We also started producing polythene paper in large quantities targeting the mass market,” said Anju.

The subsidiary got a boost in 2005, with the arrival of new machinery to produce millenary paper bags for both local and export markets. The Shahs also saw a business opportunity in the increasing use of plastic bags in the manufacturing sector and responded to it with the establishment of a recycling plant that produced plastic bags and roofing materials.

In 1993, the baking business had suffered its biggest setback after Kenya was hit by an acute shortage of wheat that almost grounded production.

“We opted to buy inputs very exorbitantly from other manufacturers to survive the crisis. We clearly understood that consumers are very keen on consistency and quality, making it imperative that we cultivate their loyalty even at the risk of suffering huge losses,” said Anju.

In 2006, Kenblest’s total daily production had grown to 330,000 loaves.

Kenblest had earlier acquired the assets of Kenya Taitex Mills, which was in the business of weaving, dying and printing textiles. The company was rebranded as Kifaru Industries Limited and transformed into a Sh30 million water bottling and maize milling unit that produced Acacia water and sifted maize meal ‘‘Two Ten.’’

The subsidiary also manufactured wax paper that it sold to Orange Kenya. Kenblest Limited later opened another subsidiary McNeel Millers Limited to mill wheat flour it used in the baking business and also sold in the consumer market under the “Two Ten” brand.

Mayur admits that it has not been smooth sailing for the family conglomerate, citing Acacia bottled water whose growth has been disappointing in a market dominated by giants such as Coca-Cola with its popular Dasani brand.

The brothers – now in their 60s – say unity of purpose is the bond that has kept the business steady and helped it grow over the decades even as its management changed through generations.

“We argue as brothers in the boardroom for the welfare of the business. We discuss ideas and decide what to implement and what to pull out. All of us understand that we are in serious business. We cannot allow family disputes to destroy,” said Anju.

To ensure long- term survival of the business, the three directors have mentored their sons and daughters to take over the business leadership when they retire.
sciuri@ke.nationmedia.com

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Sunday, June 29, 2014

Jua kali lobby seeks office for members

Jua kali artisans at work in Nairobi’s Gikomba market on May 1, 2014. PHOTO |  ANTHONY OMUYA | FILE

Jua kali artisans at work in Nairobi’s Gikomba market on May 1, 2014. PHOTO | ANTHONY OMUYA | FILE  NATION MEDIA GROUP

By Nation Correspondent
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A lobby group for informal sector workers has entered into a partnership with PTA Bank to provide operating space for members.

The Kenya National Federation of Jua Kali Association, the bank and Nairobi County authorities are now on a mission to identify more space within the Central Business District from where members can operate without interference.

According to KNFJKA chief executive officer Richard Muteti, many informal sector workers operate from home or open markets which are often disorganised. This has made the working environment very difficult for them. 

NEW CONCEPT

“But, this is a new concept where corporate institutions like PTA Bank have partnered with the federation to dignify the way this industry is run. Traders have been selling their wares on the ground and without any sheds to shield them from the sun or rain,” he said.

According to PTA Bank head of corporate affairs and investor relations Mary Kamari, financial institutions have largely ignored the micro and small enterprises sector, leaving them to chance despite the sector’s contribution to job creation and the economy.

Added Mr Muteti: “We are also working with the county government of Nairobi to identify space where small businesses can make their products and from where they can also sell. Very soon, you will see some designated streets put aside by the county government where small traders can operate from twice a week or so.”

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Monday, June 30, 2014

Elderly, poor gain in Nyeri’s war on poverty and hunger

By STEPHEN MUTHINI
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Nyeri has proposed measures to cushion the poor and vulnerable members of the society from harsh economic times.

Among the proposals contained in the 2014/2015 budget is the provision of medical care to the elderly, a widows’ empowerment kitty as well as addressing alcoholism and food security in the county.

More than 3,000 poor girls will receive sanitary pads in a pilot project that is expected to be rolled out by mid-July. Senior citizens aged above 70 would also be given free health services.

The widows’ kitty will receive Sh5 million, once legislation on how the money will be used is put in place. Persons with disabilities have not been left out as 75 residents living with Albinism will be supplied with sunscreen lotions worth Sh2 million, according to finance and economic planning county executive Martin Wamwea.

In a bid to address alcoholism, the county will this year facilitate the rehabilitation of 50 addicts through counselling and placement in support groups.

To ensure food security the county government will continue providing subsidised fertiliser and intensify training in agricultural production at the Wambugu Agricultural Training Institute.

Sh172 million has been allocated to the agricultural sector with an additional Sh35 million being earmarked for expanding irrigation projects in the county.

Mr Wamwea said the County government projects to grow its revenue collection from the current Sh442 million to Sh900million in order to finance the budget. The revenue will be mainly generated from single business permits, land rates and parking fees.

The total budget for the county this year is Sh4.7 billion with 81 per cent being financed through the equitable share from the national government.

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Sunday, June 29, 2014

Cold spell to push up milk prices as production drops

A farmer milks cows. Farm gate prices of milk are expected to go up. File 

By GERALD ANDAE
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The farm gate price of milk will go up in the coming months as the chilly weather that is being experienced in production zones cuts supplies.

Processors across the board are registering reduced milk volumes from producers, in a move that is already putting pressure on consumers who are now paying Sh2 more a packet across all brands.

“We are already feeling the impact of the cold weather which has seen milk production at the farm levels falling. We fear the trend might continue until the end of the chilly season,” said Kenya Dairy Processors Association chairperson Kipkirui Langat.

Dr Langat, who is also the managing director of the New KCC, added that starting next month, there would be new farm gate prices as a result of the declining production.

“We expect new producer prices in the coming month though we do not have the new figure at the moment that farmers will be paid as this will depend on specific processors,” he said.

He allayed fears of a sharp increase in milk prices, saying that processors have been holding huge volumes of long life products such as UHT and powder milk. This comes at a time when the country has been experiencing a milk glut that saw the price of milk in retail shops drop by Sh5 to Sh10 in the last three months.

Increased production also resulted in the drop of producers’ price from Sh40 last year to Sh30, before Brookside Dairies raised their price to Sh35 last month. Dr Langat said that on average, processors are paying Sh32 to the farmers currently.

Brookside has an installed capacity of 1.15 million litres, making it the largest processor in the market. The New KCC has a capacity of over 500,000 litres.

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Tuesday, June 24, 2014

Agency leaves mini-bonus tea pay to factories

Workers load tea bags on factory conveyor belts at Chinga Tea Factory in Othaya. President Uhuru Kenyatta has called for harmonisation of levies and cess being charged on tea farmers by county governments. PHOTO/FILE

Workers load tea bags on factory conveyor belts at Chinga Tea Factory in Othaya. Small-scale tea farmers are uncertain if they will be paid a mini-bonus next week as directed by President Uhuru Kenyatta. PHOTO/FILE  NATION MEDIA GROUP

By ZEDDY SAMBU
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Small-scale tea farmers are uncertain if they will be paid a mini-bonus next week as directed by President Uhuru Kenyatta.

Factories in parts of the tea-rich Rift Valley have ruled out the pay while those in Meru and Central Kenya have made plans to pay out.

Kenya Tea Development Agency, said it is up to individual factories to decide whether to pay or not. The agency, which runs 65 factories country-wide on behalf of farmers, introduced the interim bonus after farmers complained of financial difficulties in maintaining their crop and the time difference before the main and final pay around October each year.

“We got a directive to pay and it is up to the factory boards to decide. We are awaiting for resolutions by the factory boards to pay or not to pay,” said Mr Albert Otochi, the agency’s head of marketing.

He said the factories would also decide the source of funds “which include borrowing. There is still time” said Mr Otochi.

In March/ April, on account of depressed international tea prices at the Mombasa auction among other reasons, the agency advised factories not to pay the mini bonus and instead re-invest earnings.

Relief to farmers

But a meeting at State House between the government and stakeholders on June 11, directed payment of a mini bonus by the end of the month.

The announcement came as a relief to farmers, after an earlier cancellation.

However, Agriculture Secretary Felix Koskei Tuesday insisted the government directive stands.

“We discussed with tea agency and agreed that they make available a facility for payment. Most factories in Nyeri, Embu and Meru region have paid. Those west of the Rift Valley have politicised the issue,” he said in a telephone interview.

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Wednesday, June 25, 2014

Obey order on new rates, NSSF warned

NSSF managing trustee Richard Langat. Lawyers for KPAWU said they had received an email from Mr Langat directing staff to proceed with the new NSSF deductions in spite of a court order. They warned that the deductions would be against orders issued by the Industrial Court in Nakuru. PHOTO/FILE

NSSF managing trustee Richard Langat. Lawyers for KPAWU said they had received an email from Mr Langat directing staff to proceed with the new NSSF deductions in spite of a court order. They warned that the deductions would be against orders issued by the Industrial Court in Nakuru. PHOTO/FILE 

By Nation Reporter
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A workers’ union has warned National Social Security Fund against collecting new rates until a final decision is reached by the court Wednesday.

Lawyers for the Kenya Plantation and Agricultural Workers Union (KPAWU) wrote to NSSF, warning that the deductions would be against orders issued by the Industrial Court in Nakuru.

The union, through lawyer Mutua Muli, said it would move to court to block any deductions and have the NSSF cited for contempt, if the new rates are effected.

Mr Muli said they had obtained an email from the fund’s managing trustee Richard Langat directing staff to proceed with the new deductions in spite of the court order.

Wrong interpretation

“We would like to draw your attention to the fact that courts do not issue orders in vain and your interpretation of the said order is misleading, blatantly wrong and erroneous... we are going to cite you for contempt and hold you to account,” he said in a letter addressed to Mr Langat.

He said the NSSF boss was duly served by the court order which is binding.

“This is informed by the fact that the said court order was duly served upon you with a penal notice attached and any contravention of it will invite contempt proceedings,” he warned.

The letter was copied to KPAWU secretary-general Francis Atwoli who is also the Cotu boss.

Mr Muli said the court order was clear that the pension fund should not effect the new deductions.

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Wednesday, June 25, 2014

With clear vision, the sky is the limit

When you are planning your first entrepreneurial venture, you may not be able to perfectly define your mission or vision. FILE PICTURE

When you are planning your first entrepreneurial venture, you may not be able to perfectly define your mission or vision. FILE PICTURE 

By Richard Branson
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Q: What role did passion play in your choice of which businesses and opportunities to pursue?

— Luke Gorski

Virgin has started hundreds of businesses, so I have a lot of interests!

Your question gets at how I find the drive to start new entrepreneurial ventures after more than 40 years in business. After all, the job is never done for an entrepreneur.

There are the daily challenges of keeping the new business going, the big picture projects that must take priority, and the need to innovate and improve constantly, changing your offerings as the market shifts.

Part of the answer lies in some lifestyle choices — I recharge by getting plenty of exercise and spending as much time with friends and family as I can.

But overall, what keeps me going is my sense of mission, and the strange thing is, mine is an impossible one.

This was not my plan when I started out, though I was always driven by the desire to change things for the better.

That was what motivated my friends and I to launch our first business, Student magazine, in the 1960s: We wanted to give young people a voice on issues such as the Vietnam war.

That spirit of hopefulness and commitment to concrete change continued through every business we launched afterwards and it is still true for our newer businesses like Virgin Galactic, which is gearing up to become the first company to offer commercial space flights.

Over time, as we learned more about business and entrepreneurship, our mission began to come into focus: We wanted to create a better world where businesses are driven by a strong sense of purpose that balances their needs with those of people and the planet.

Once we had articulated that vision (lots of businesses struggle with this exercise), we were able to break it down into the common goal that all Virgin businesses rally behind: To use our entrepreneurial spirit and resources to disrupt and reinvent every sector we are in, transforming the way everyone does business along the way.

This mission makes us innovative in ways we could never have anticipated.

When we started Virgin Atlantic in 1984, most of our competitors offered awful service, so we won their customers away by providing truly amazing customer service, along with innovations such as in-seat entertainment systems that gave passengers control and choices.

Thirty years later, many of the improvements Virgin introduced have been adopted by others, while we continue to look for new ways to delight our customers.

One of the challenges the airline industry faces is its voracious appetite for fossil fuels and its resulting carbon footprint.

Many airlines now offer their passengers the chance to purchase some form of carbon offset, but that does not really tackle the issue of fuel efficiency. We decided to go even further and look into the fuel itself.

Would it be possible to develop a commercially viable jet fuel made from renewable sources?

In partnership with the biotechnology firm LanzaTech, we have made enormous progress toward this goal —renewable fuels now have the potential to revolutionise the industry in a few years’ time.

Our sense of purpose has helped to unite the teams working on the different aspects of this problem.

There are plenty of stories like this one across the Virgin Group.

The point is that as an entrepreneur, your journey is never over, and your mission should be broad enough to encompass other industries and sectors, if that is what is required to bring about change.

No matter if you make butter or ball bearings, you can still make a difference as long as you have a great idea and a vision your team believes in.

When you are planning your first entrepreneurial venture, you may not be able to perfectly define your mission or vision.

You can clarify matters quickly by designing your offering according to your values — if you want to sell butter, for example, you will have to tackle issues such as animal welfare and sustainable farming.

As your business plan takes shape and you pursue the innovations that your values require, your sense of mission may emerge.

Those goals will help you to instil the right kind of organisational culture — to make sure your team never sees its journey as complete, and quickly moves on to the next challenge.

As your business expands, you will find that however successful a quarter has been, you can always do better next time.

Rather than being discouraged, view this as an opportunity, another chance to make a lasting, positive contribution to the world.

Questions from readers will be answered in future columns. Send them to RichardBranson@nytimes.

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Friday, June 20, 2014

What small businesses should expect from the new Budget

A small business enterprise trader. After the budget speech was read last week, I ran through it to see what could be in it for SMEs. PHOTO/FILE

A small business enterprise trader. After the budget speech was read last week, I ran through it to see what could be in it for SMEs. PHOTO/FILE 

By MUTHONI NGATIA
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THE BUDGET SPEECH was read last week.

I ran through it to see what could be in it for SMEs.

I am, however, still disappointed that the government is always ready to read the Budget and never to give a report card on whether the last budget had the desired economic impact.

As we know, there is the Budget, then actual revenues collected and the actual money spent.

If revenues are off target and money is being returned to the Treasury, how will government spending boost business?

Let’s begin by looking at customs.

The following can be regarded as friendly customs havens. Going green as an importer makes good business sense.

Import duty has been removed on machinery, spares and inputs for direct and exclusive use in the development and generation of solar and wind energy.

Agribusiness also got a boost as inputs used in processing and preservation of seeds for planting will be exempt from import duty.

Then we had new hostile custom havens.

Big manufacturers in Mariakani and elsewhere will not like the increase in import duty on iron and steel products from 0 per cent and 10 per cent to 25 per cent. This will impact the construction industry, with the cost likely to be passed on to the consumer.

Now you have motivation to file Paye or motivate staff as the government has allowed the deduction of expenditure incurred by employers who meet the cost of their employees‘ vacation within Kenya.

This deduction is only available for 12 months. The benefit will also not be subject to Paye.

There was, however, a challenging compliance requirement where the period for remittance of NSSF contributions reduced from 30 to 10 days.

Considering that NSSF rates are going up starting this month, many people may not like this.

Consider scouting for business at these dockets: Security, with Sh6.7 billion for leasing of 2,700 motor vehicles and aircraft for surveillance and response. Those in the hiring business should look in this direction.

Security equipment upgrade

There is also Sh2.9 billion for recruitment and training of an additional 10,000 police officers.

Consumables will create opportunities here. Then there is the Sh71.3 billion allocated to the Kenya Defence Forces.

I see opportunities in the Sh3.5 billion for security equipment upgrade and modernisation.

The total budgeted expenditure for Energy, Infrastructure and ICT is about Sh400 billion (both recurrent and development).

Sh116.7 billion has been allocated to both ongoing and new development of roads.

Several SMEs are in this space in different capacities from equipment leasing, car hires and supplies.

The energy sector got Sh23 billion for electricity transmission infrastructure and Sh10.6 billion for rural electrification.

These works are largely outsourced.

Education sector was allocated Sh294.55 billion, an increase of 7.6 per cent.

The allocation is expected to enhance access to education and transform the education system, including free primary and secondary education and teachers’ salaries.

The health sector has been allocated Sh28.7 billion.

There will also be budgets for health care functions at county governments — who are handling county health centres and pharmacies, ambulance services, promotion of primary health care, licensing and control of undertakings that sell food to the public, refuse removal, refuse dumps and solid waste disposal.

Agriculture got a boost through the Agribusiness fund, which will be accessible to the private sector.

Financial institutions have indicated willingness to leverage government’s seed capital by a scale of one to 10.

Consultants should also look out for funds allocated for “Enhancing Employment for Women and Youth”.

Some Sh24.495 billion has been set aside for enhancing women and youth empowerment.

The amount will be used to improve access to affordable credit. This will promote entrepreneurship and improve skill sets needed.

There is also Sh8.1 billion for recruitment and training of 21,870 youth to the National Youth Service who will work on community development projects.

Counties and Devolution got Sh226.7 billion So, don’t just concentrate on the big towns. Find out what these 47 counties are doing.

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Friday, June 20, 2014

Young graduate well suited for success away from formal jobs

Alicia Wanjiku Chege. She says her sister was a big inspiration, as she completed her internship, her sister resigned from her white collar job to concentrate fully on business. PHOTO/ANTHONY MAKOKHA

Alicia Wanjiku Chege. She says her sister was a big inspiration, as she completed her internship, her sister resigned from her white collar job to concentrate fully on business. PHOTO/ANTHONY MAKOKHA  NATION

By Lilian Ochieng'
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Alicia Wanjiku Chege, now 24, could not bear the thought of being formally employed.

She ventured into business rather than seek a job.
On completing a diploma course in purchasing and supplies management at the Kenya Institute of Management, she started her journey as an entrepreneur.

She would sell imported bedding and fancy bags to her lecturers and friends while she was an intern at the Ministry of Foreign Affairs and International Trade.

“I did this for a year — since 2012. I just chose to be self-employed,” says Ms Chege.

“Meanwhile, I sold my goods alongside my older sister Leah Chege.”

She says her sister was a big inspiration, as she completed her internship, her sister resigned from her white collar job to concentrate fully on business.

“I was surprised and confused by her move at first.

I thought it was weird to quit her job while I was just beginning my job search mission,” she says. She was 23 at the time.

“On second thought, I decided not to look for a formal job.

As my sister imported clothes from China, I also ordered my bale. I, however, specialised in bedding and bags.

“The first amount of money I got from my first sale was Sh10,000.

It was rewarding to have money when my peers were still job seeking,” says Ms Chege,

“I promised myself I would concentrate on my business so that I would gain more.”

By last July, Ms Chege had fully made up her mind to be her own employer, she set aside Sh5,000, prayed and believed that her hard work would take her places.

Without a shop to sell her wares, she braced for tough times ahead. Her sister still assisted her to import goods.

“I didn’t want to be like other unemployed youth who were seeking greener pastures elsewhere; I had tried to seek help from the Youth Enterprise Development Fund but there are several targets I had to meet to get the funds.”

With her unbeatable spirit, she promised herself never to give up.

Her Sh5,000 capital grew within a few months to Sh50,000.

She was, however, troubled by the fact that she had no shop where customers would buy her wares from.

“I invested in a computer that would help me be very active, selling goods online.

I got a City Council business licence at Sh5,500 and rented a shop at Sh10,000 monthly.”

She also marketed her wares on Facebook, OLX, Twitter and other online sites.

Ms Chege currently boasts of stock worth Sh100,000.

She majors in selling custom made bedding like duvet covers, bed sheets, which she spices up with homemade matching mosquito nets.

Initially, she had fears that her business would fail considering the fact that many other businesses deal in bedding.

She said she built up her confidence by beating her competitors through scouting for top notch designs from Dubai and China and lowering her price a little to attract customers.

In a good month, she makes about Sh100,000 profit.

“I will never seek formal employment, I want to own a big company one day that specialises in bedding and clothing.

She says she needs about Sh5 million to import her ware in containers, hence becoming a wholesaler.

To do that, Ms Chege is prepared to start scouting for government loans.

“I urge youth who have a head for business to go ahead, fear has always stood between us and success,” she says.

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Friday, June 20, 2014

When rabbit urine, loans yield tidy sums

Rabbit farmer Humphrey Wangila is one of the farmers who have diversified their activities after getting agricultural skills, farm inputs and credit to increase productivity. PHOTO/MAZERA NDURYA

Rabbit farmer Humphrey Wangila is one of the farmers who have diversified their activities after getting agricultural skills, farm inputs and credit to increase productivity. PHOTO/MAZERA NDURYA  NATION

By MAZERA NDURYA
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A group of farmers in Bungoma and Busia counties has taken to microfinance to increase crop acreage after many years of letting huge chunks of land remain underused.

Blaming poverty and lack of access to farm inputs, more than 300 farmers have increased food production in the past two years, thanks to accessible credit.

Some have diversified into other farming activities such as rearing of rabbits, dairy goats, fish and traditional chicken, which are fetching tidy sums of money.

Humphrey Wangila is one of the farmers who have diversified their activities after getting agricultural skills, farm inputs and credit to increase productivity.

Others like Agnes Magero, a widow and mother of eight, are increasing the acreage under maize.

Now Wangila wants to increase his rabbits to 100 in the next few weeks because of the many benefits from the animals.

For an area where the number of chicken and cows one owns seem to define wealth, Wangila is trying to beat the odds and taking the enterprise to new heights.

Wangila, of Mukuyuni village in Bumula, Bungoma County, is not your ordinary rabbit farmer. He is adding value to what many would describe as child’s play.

The father of five children is also selling rabbit urine and dung to farmers who have come to learn about the intrinsic value of organic manure.

“At first it was a pastime with just two rabbits which I got from Action for Rural Health and Development (Rural Action), an organisation working in Bungoma County.

The information I got about rabbits made me take the bold step of rearing them,” said Wangila, who spoke after receiving a Sh20,000 loan from the firm’s CEO, Mr Joseph Atsali.

A few drops of urine can be used as nutrients for crops, especially for top dressing.

From a simple structure where he keeps rabbits, Wangila has devised a system of trapping the urine and the dung.

During the interview, he had in his store about 25 litres of urine, which he would sell to farmers at Sh1,000 a litre. He was expecting to earn Sh25,000 as demand rises.

Wangila has also experimented with tree seedlings and has become a role model in the village that is known for sugar cane and maize growing.

Hezbon Itumbo, another farmer in Teso, now has every reason to smile as he watches his six-acre piece of land bloom with a healthy maize crop.

Last year he managed to cultivate only one acre but this year he has added five more acres.

He expects to produce more than 100 bags of maize.

“We have been sitting on wealth all these years.

“Most of us have been complaining about poverty even though we have been blessed with fertile land that has just been lying idle.

The farm inputs have changed everything for me and other farmers,” he adds.

In Kocholia, Teso, in Busia County, Mrs Magero is planning to increase acreage under maize to use the family’s 20 acres.

“Last year I planted half an acre but this year I have increased to one acre, and hope to cultivate more next year because of the new scheme, which enables me to get fertiliser and certified seeds.

“We have also decided that as neighbouring farmers, we seek loans to purchase cows for ploughing because we cannot afford to hire tractors,” she says, adding that with proper husbandry she can produce 20 bags of maize from the one-acre land she has cultivated this year.

Mr Atsali, who heads Rural Action, says the organisation spends about Sh1.3 million in farm inputs to farmers.

About 100 acres are being cultivated, with more expected soon, he says.

“The biggest challenge facing our farmers in rural areas is that while land is readily available most of them cannot afford the high cost of farm inputs and end up cultivating just small portions which is not even enough for their sustenance.

“There is great potential and as a country, empowering rural farmers can greatly help in addressing food security as well as creating wealth,” Mr Atsali said.

He said most of the farmers are able to repay the money they borrow in one season because of better yields from improved farming methods that include use of proper seeds and fertilizer.

Mr Atsali said many rural farmers were hearing about microfinance for the first time because of lack of information.

For one to benefit, they register and buy shares into the organisation which enables them to borrow money.

“This has now inculcated a culture of savings among the local people.

We would like to see them venture into other crops apart from maize so that with time they will be able to undertake value addition for their produce and earn more,” he said.

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Friday, June 20, 2014

How Sh5 salary from firewood job helped found lucrative hotel

Kipeen ole Sayialel owns three booming tourist hotels, including the prestigious Riverside Campsite Resort in Maasai Mara Game Reserve and Loita Plains Hotel in Majimoto, along the Narok-Sikinani Road. PHOTO/GEORGE SYAGIE

Kipeen ole Sayialel owns three booming tourist hotels, including the prestigious Riverside Campsite Resort in Maasai Mara Game Reserve and Loita Plains Hotel in Majimoto, along the Narok-Sikinani Road. PHOTO/GEORGE SYAGIE  NATION

By GEORGE SAYAGIE
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The first thing that strikes you when you meet Kipeen ole Sayialel is his sharp business acumen.

Kipeen, 69, has risen from earning Sh5 a month fetching firewood for colonial settlers in 1952 to become a successful businessman in the hotel industry in the Masai Mara game reserve.

His hotel businesses are fast closing in on Sh500 million mark in worth, which he realised from saving most of his monthly salary of Sh5 a month for 22 years.

His road to entrepreneurial success has been long and winding, starting out as a labourer for a group of white settlers making cream in Narok County. He used to fetch firewood for them to light boilers in their creameries.

The former Majimoto location chief now owns three booming tourist hotels, including the prestigious Riverside Campsite Resort in Maasai Mara Game Reserve and Loita Plains Hotel in Majimoto, along the Narok-Sikinani Road.

“I always wanted to be a successful businessman,” says Kipeen, who is also chairman of Olare Orok Conservancy, and Olkiombo Group Ranch that houses a hotel business owned by the family of President Uhuru Kenyatta.

“I denied myself all pleasure and saved most of my earnings from 1952 to 1974. That is when I quit employment and ventured into business, mainly buying and selling cattle,” says Kipeen.

The father of 15 children and three wives says his background — his father had six wives — challenged him to do something that would earn him a living and help take care of his mother, who was the youngest wife.

“At that time, my age group was making a living through cattle rustling on the Kenya-Tanzania border and enjoying moranism and the goodies that go with it. But I decided to avoid illicit trade and pastoralism,” he says.

In 1974, with no formal education, he had Sh310. That was enough capital to start a business. He resigned from his firewood fetching job and started buying and selling cows.

“I had this feeling that I could succeed. Since I made Sh1,000-2,000 selling cows, I knew I could do much better with higher capital investment,” says Kipeen.

As his income grew, he began saving in a bank. Later, he was employed as a casual worker at the now defunct Narok County Council to collect revenue at the gates of the Masai Mara reserve.

This became a good platform to launch his hotel business. He opened his first hotel in the Masai Mara just 2km from the Talek gate.

“There were unexploited opportunities. Competition was not very high. I used to charge Sh30 per visitor for an overnight stay at my campsite,’ he recalls.

“I carried out a survey on my farm at Majimoto, on the Ewuaso Ngiro-Maasai Mara Road, and saw a perfect opportunity to start a tourist facility — the Loita Plains Motel,” he says.

His venture also benefits from the annual wildebeest migration from the Serengeti in Tanzania to the Masai Mara Reserve, with the hotel hosting extra visitors when accommodation is limited.

The motel is set in a quiet, serene location and has self contained rooms, swimming pool, and a picnic site. These attract tourists and honeymooners.

He challenges young people in the region, which is mainly dependent on livestock rearing, to start their own firms.

“The bottom line of going to school is to live a good life later on.

A good life requires money and good money can be found only in business.

As an employee, you will never make more money than your employer.

You can only do that if you go into business and become your own boss,” he says.

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Wednesday, June 18, 2014

Technical students enter competition

By SIMON CIURI
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Chinese firm AVIC International Holdings through its engineering arm has signed a pact with Ministry of Education, Science and Technology targeting young entrepreneurs in technical institutions who have ideas that can be turned into a business.

The institutions that are participating include University of Nairobi, Jomo Kenyatta University of Agriculture and Technology (JKUAT) and Kitale Technical Institute. The participants will be trained from next month while competition to start in August.

Winners will be announced September.

The teams are made of three people, who will land a chance to work with the financier and get $500 each.

Apart from the monetary awards, the company said will work closely with “reputable” Chinese companies to sign a contract with the winning team so they can go into commercial production after the competition.

“We have already shipped the steel bars and raw materials and tools that will be used by the participants during the contest and that will be awarded to the winning team after the competition,” said AVIC International Holdings Vice Chairman Liu Jun.

AVIC International Holdings is a State-owned company with many projects in Africa.

Potential entrepreneurs

“AVIC International Holdings will train participants in July for 15 days before the preliminary competition and for 35 days in August before the final competition in September,” AVIC International  Holdings Project Manager, Lynette Mwende said Friday.

“This training will fully equip the participants with the technical skills, not only to be competent but also to facilitate entrepreneurship and self-employment,” she said.

The challenge is designed to cultivate the spirit of entrepreneurship among the potential entrepreneurs who are looking at having careers in technical fields after graduation.

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