King-sized royal celebration

Every April 27, we celebrate King Willem-Alexander’s birthday. King’s Day is more than just a party; it is a day of celebrating Dutch culture and community. This year, we also celebrate 60 years of diplomatic relations with Kenya.

Our relations go back further: Dutch individuals, associations, churches, institutions and businesses have long ties with their Kenyan counterparts.

Often, the personal interest of traders and investors who wanted to explore possibilities in Kenya drove bilateral economic relations, coupled with Kenyan hospitality in a market-oriented economy. That is typical for family-owned businesses (FOBs).

Many companies in the Netherlands are of small and medium size and have expanded with family capital, private equity capital and bank financing.

Only a few Dutch SMEs are shareholder companies. FOBs form the core of SMEs and, hence, a rich tradition. They are built on generations of experience and play a significant role on the international stage and in fostering bilateral trade and investment.

There are more than 100 Dutch companies in Kenya. And data show 60 per cent of Dutch FOBs operate internationally. The Netherlands being a small country with a limited market size, diversifying to international markets is essential businesses to foster. Research shows Dutch FOBs that internationalise operations outperform their domestic counterparts, with more profits and better scalability.

The Netherlands is a hub, a gateway into Europe with a very strong international character. Similarly, Kenya, as the regional hub, is a gateway for Dutch companies to expand into East Africa.

This link explains why the Netherlands is not only one of the biggest trading partners for Kenya but also among the top five foreign investors. De Heus, Heineken and Royal Dutch Flower Group are among the Dutch FOBs successfully operating in Kenya.

FOBs’ social responsibility focus originates in their family character: Not short-term profit objectives but longer-term strategic goals, including a desire to make a difference. Compared to shareholder companies pressured by quarterly results, FOBs see businesses as a facility to create value and not as an asset with value on the market.

A recent PricewaterhouseCoopers report confirms that FOBs show resilience by anchoring themselves in their host communities and taking their interests at heart. During Covid, for instance, employment with FOBs rose as it contracted considerably in other companies.

Capacity to innovate

FOBs also show capacity to innovate, thus able to grow and respond to changing demands of clients. With younger generations at the helm, FOBs are becoming more eager to reduce their environmental impact.

These long-term inspirations translate to a strategic focus on building stable partnerships with all stakeholders, contributing to the long-term success of companies and the society’s well-being.

Kenyan FOBs are a driving force in the nation’s economy. Their deep local knowledge allows them to tailor products and services effectively while their flexible structures enable quick adaptation to changing markets. However, challenges like succession planning and access to capital hinder growth.

The investment climate contributes to positioning Kenya as a premier global investment destination. The business environment must foster investor confidence. That means prioritising stability, efficient regulations, predictable policy and transparency.

The future of Dutch-Kenyan relations is bright, and FOBs are at the heart of it. Through the Netherlands Business Hub, deeper relations can be fostered by connecting businesses from both countries.

Happy King’s Day to all our close friends in Kenya!

Mr Brouwer is the Ambassador of the Kingdom of the Netherlands to Kenya. [email protected].