NAIROBI, Feb. 17 (Xinhua) -- Kenya's cable manufacturing firm, the East African Cables said Tuesday it was set to enhance its continental market reach with an ambitious expansion plan in the next three years.
The firm's expansion plan to be spearheaded by the firm's newly appointed CEO George Mwangi will see East African Cables establishing a solid market presence in more than 12 African countries up from its current five countries market footprint by the year 2012.
"As the regions premier cabling solutions provider, we have now moved to set the stage for a strategic market expansion drive," Mwangi told journalists in Nairobi.
Alongside market expansion, the firm is gearing up for the commissioning of a new copper cables production line and major upgrade latter in the year within its recently commissioned 1 billion shillings integrated manufacturing facility in Nairobi's Industrial area.
Mwangi said the firm will be sparing little effort to attain its targets in the region. "This market expansion drive is borne out of a need to further enhance share holder value in lean times."
In order to drive growth and profitability, Mwangi said that East African Cables will be seeking to strengthen its local market positioning while expanding its continental reach by enhancing its distribution and sales capabilities in the new markets.
The commissioning of the new copper production line is expected to boost East African Cables production capacity by more than 60 percent. The firm's affiliation with Nexans, the global expert in cables and cabling systems is also bearing fruits.
Mwangi said that the company will leverage on key local partnerships to penetrate the new markets. The firm will also be integrating its production capacities across its Kenyan and Tanzanian production plants for increased efficiencies as its moves to capitalize on expected growth in the regional markets.
Regional market growth is expected on the back of regional rural electrification programs and regional building construction projects. Currently operating in the five East Africa countries of Kenya, Uganda, Tanzania, Rwanda, and Burundi, East African Cables has grown its export portfolio which accounted for 57 percent of its turnover in 2008 compared to 31 percent the previous year.
East African Cables Group chairman Zeph Mbugua disclosed that the firm is investing more than 5 million U.S. dollars in ongoing capacity enhancement projects at both its Kenyan and Tanzania manufacturing plants.
Mbugua said by further moving its range of products to key markets such as Ethiopia, Somalia, southern Sudan, Djibouti, Burundi, Eastern DRC, Zambia, Zimbabwe and Mozambique. The company will also be focusing on a diversified customer base across the market.
Mwangi cited fluctuations in aluminum business to the local utility -- Kenya Power and Lighting Company (KPLC) which accounted for about 10 percent of the group turnover down from 28 percent the previous year. However, on a positive strategic note, this serves to eliminate concentration risk.
However, Mwangi noted that fluctuations in metal prices coupled with competition from imported subsidized and cheap substandard products and the resultant effects of the global financial crisis may impact on key markets. Other reasons cited were currency, political and economic risks in emerging markets.
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