Private security firm, KK Security, has acquired a fire services company aiming to tap into the fire fighting business that has been growing with the collapse of State-backed service providers.

Last week's acquisition of Knight Support makes KK the second private security firm to enter the fire fighting business that has been traditionally the preserve of public service providers, but is increasingly attracting private players looking for new revenue streams.

The deal, made public through a gazette notice, gives KK full control of Knight Support for an undisclosed amount of money and puts the company in direct competition with G4S, the British conglomerate, whose Kenyan subsidiary last year acquired Urban Fire Services.

KK Security's entry into the fire fighting business is not only being seen as signalling the continued erosion of public confidence in State-backed providers, but also a determination by the security firms to grow their earnings by charging premium prices for bundled services that include manned security cash transfers and courier business.

"The acquisition enables us to enhance our services and diversify from reliance on traditional guarding services," said Mr Patrick Grant, the managing director of KK Security, without disclosing the value of the deal that got the green light three weeks ago.

Industry players say the entry of security firms into the firefighting business is also informed by insurance industry trends where premiums for fire policies are pegged on proof of better protection arrangements.

"Some insurers are charging lower premiums for clients who show proof of being backed by a private fire firm," said an insurance broker, who declined to be named because the policy has not been officially made public by the relevant firms.

Kenya's private firefighting business is now estimated to be worth Sh5 billion, a large fraction of which is currently in the hands of G4S. Since the operation was launched early last year, fire fighting has become an important revenue stream for G4S which not only sells the service directly to corporate clients but also charges fees for backup services to competitors' clients.

Increasing levels of fatality in fire accidents with the deterioration of service quality offered by public firms has forced business leaders to seek alternative means of protection from private security companies.

Private firms have responded to this need by rolling out a number of service packages that include guarding, escorts and firefighting to their clients.

The business is expected to double in the next two years as corporations, foreign missions and high net worth individuals turn to these firms to manage their fire risks.

Though more reliable compared to government-backed service providers, hiring of private security firms represents a new cost of doing business in key Kenyan cities such as Nairobi where fire outbreaks have become a regular phenomenon with fatalities in most cases.

The acquisition of Knight Support adds firefighting to the range of services that KK Security offers, including manned guarding, alarm systems and dog handling. In addition to firefighting, the Karen-based Knight Support offers fire audits and assessment and vends fire equipment.

It is not clear whether KK will extend the firefighting services to its subsidiaries in Tanzania, Uganda, Rwanda, Congo (DR), Burundi and Southern Sudan.

Daniel Okoth, the communications manager at G4S Kenya, said the entry of KK into firefighting is an indication of the growing interest in the business. "Consumers stand to gain from the level of competition that is bound to ensue," he said.

Knight Support's Kenya operation had about 60 clients most of who are located in the upmarket Karen area. Consumers of the company's services mostly bought a bouquet of services such as alarm response, security and evacuation that the company used to sweeten its fire fighting offer.

Private fire operators also offer fire awareness training, sale and maintenance of fire fighting equipment and rental fire engines, especially to event managers.

A three-hour fire awareness training session for 25 employees costs an estimated Sh25,000 making it one of the most highly priced services in the security industry. The training covers basic knowledge such as causes of fire, evacuation, immediate fire risk assessment, use of extinguishers and dealing with burns.

It costs between Sh25,000 and Sh40,000 to hire a fire engine for an eight-hour event, but companies can pay Sh30,000 per month for a rapid response in the event of a fire.

Industry operators say it costs more to call in private fire fighters in the event of a fire outbreak in premises for which they have not been retained to offer the service.

Retail chain Nakumatt, is for instance said to have been asked for Sh2 million down payment when a fire broke out at its downtown branch in Nairobi in January when it called in private operators.

When the building is not on an annual contract, the fire fighting firms assess the cost on site before asking the owners of the building or property to commit in writing that they will pay the amount whatever the outcome.

"We must work out how to make money with this new arm now that we are in the business," said Mr Grant.

Rising corporate concerns over fire risks are mirrored by the year on year growth of industrial fire insurance business, whose premiums grew by 13.4 per cent in 2008 compared to the previous year.

The Association of Kenya Insurers data shows that premiums on domestic and industrial fire topped Sh4.3 billion or 11.7 per cent of the total insurance premiums that year and is expected to have grown by a similar margin last year.

Domestic fire premiums were Sh672,104 in 2008 a growth of 8.1 per cent compared to the previous year. Loss ratio for domestic fire was positive at 35.2 per cent while that of industrial fire was positive 51.1 per cent, indicating that the business made profits.

In addition to risk posed to people and investments, the insurance industry has been under increasing threat of fire accident claims, a move that has seen them urge their clients to sign up for private fire services to lower their risks and premium.

Since the Nakumatt fire in February this year, insurers are said to be insisting on their clients to show proof of having fire risk survey certificates on premises before they are covered.

The risk survey shows the level of fire safety compliance within premises, including the availability of fire fighting equipment and building structures with ease of escape in case of fire. Premises with high levels of compliance are given discounted premiums.

Vast opportunityA survey done earlier in the year by the Nairobi Central Business District Association (NCBDA), however, found that only 10 per cent of premises in Nairobi are prepared to handle fire accidents.

Industry players say that situation has presented a vast opportunity for growth of the fire fighting business because most premises in Nairobi for instance are ill equipped to prevent fire accidents.

KK Secuirty and Knight Support have been working closely since June this year and the gazette notice was only a confirmation of the long running association, according to the letter sent by Knight Support official Lucy Nyambu.

Local authorities fire services have been the subject of criticism for inefficient service delivery, often arriving at the scene late, or when on time, without all the facilities required to contain fires.

They have more recently been overwhelmed by big fires and more often seek support from disciplined forces and some government agencies to fight fire.The latest developments come at a time when security firms are reaping from increased investment in crime detection and protection services by businesses and community groups amid fears that job losses caused by the economic slowdown would spawn a new wave of petty, violent and organised crime.

The economic slowdown has come at a time when inflation pressures, fuelled by the increase in price of food, electricity and fuel have eroded the purchasing power of personal incomes.