11 June 2007

Rwanda: Nakumatt Prepares to Sell in Rwanda

Kigali — One of Kenya's leading department stores, Nakumatt, is to invest US$3million in its first store in Kigali set to open in November 2008.

This was revealed to Business Week in an interview with the Nakumatt's Nairobi-based operations dierctor, Mr. Thiagarajan Ramamurthy at Kigali Serena hotel recently.

He was in the country to attend the recently concluded 4th Rwanda International Investment Conference that took place at the same venue.

He says Nakumatt was attracted by the country's economic growth at 5.8% coupled with the good political climate and reduced political risk.

"There is increasing demand and we want to give Rwanda a one-stop shopping experience as a truly East African company. We shall have 50,000 different items including a cinema centre. We are looking at 1 million potential customers from 250,000 households," Mr. Ramamurthy explained.

Kigali city has a population of about one million people.

The new store will cover 70,000 square feet with ample parking space, restaurants, a food court and a modern 24 hour pharmacy amongst other facilities.

Nakumatt initially plans to train and employ 150 Rwandans in retail computing, procurement, space management, marketing and advertising.

Experts from Nairobi will come to train the new staff in Rwanda while some trainees will be taken to the vibrant Kenyan Nakumatt stores for exposure and practical hands on experience.

"We changed the way people shop in Kenya and we are going to do the same thing here. Many people will be taken by surprise. We are a fair employer and give decent salaries to our staff. They will have disposable income," he told Business Week.

The planned expansion into Rwanda is part of a US$20million expansion drive of the chain store that has an annual turn over of US$300million according to Ramamurthy.

The Nakumatt chain modeled along the same lines as Target and Walmart stores in the US and Tesco in the UK has 18 stores in Kenya.

Another 12 new stores are planned in different parts of the East African community (EAC). The US$18million EAC expansion drive will comprise 5 stores in Uganda, 5 in Tanzania and 3 in Rwanda.

Ramamurthy explained that they plan to have a product range of up to 50,000 items.

"We will have a large variety and sell at the same prices in all stores when we come to Rwanda. This is what we do in Kenya."

Rwanda suppliers particularly in the dairy industry, confectionery, soaps and detergents, fresh produce and grains, now have a market to aim at.

He however maintained that Nakumatt does not compromise on quality.

Producers and suppliers have been advised to work on quality if they want to acquire the companies highly competitive shelf space.

"Suppliers need to be aggressive and focused. They should have long term plans and increase on their capacity," he said.

This will enable more revenue for suppliers and producers due to innovations and inventions associated with increased product range.

Nakumatt stores, a family owned business that employs 3,200 in Kenya plans to list on the Nairobi Stock Exchange (NSE) in 24months.

They aim to have 30 stores in East Africa before cross listing.

Last year, Nakumatt contributed $7.5million in taxes to the Kenya Revenue Authority (KRA). This year they hope to up it up to $10million.

In 2006, Nakumatt contributed $2million in corporate social responsibility (CSR) in different fields that include infrastructure, health, water and sanitation and sports.

Ramamurthy told Business Week that Nakumatt plans to have one big central warehouse and redistribution system for all its stores in the East African community (EAC).

Copyright © 2007 East African Business Week. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 2,000 reports a day from more than 130 news organizations and over 200 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.