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Eyes On the Sudanese Market

The East African Standard (Nairobi)
NEWS
January 23, 2005
Posted to the web January 24, 2005

By Michael Omondi
Nairobi
Investors are positioning themselves to exploit business opportunities expected
to emerge in a peaceful Sudan.
Even though Kenya exports various goods to the Sudan, the volume of trade is
expected to rise steeply should the comprehensive peace agreement between
warring factions hold.
A technical committee set up by the Kenya National Chamber of Commerce and
Industry, the Kenya Association of Manufactures and the Ministry of Trade will
ensure that entrepreneurs do not miss out on the unfolding opportunities.
"Kenya should not be left behind," the commerce chamber's chief executive
officer, Mr Titus Ruhui, said. "There is big money expected from Sudan,
especially in the construction industry. And it is time manufacturers set their
sights on that market."
Sudan, the largest country in Africa, has been ravaged by a 21-year war that
has left its infrastructure in a sorry state. The South has virtually no roads,
schools and hospitals to speak of.
After signing of the peace accord, donors pledged millions of dollars for
reconstruction that will open up the southern region, which has faced years of
neglect from the government in Khartoum.
Ruhui says there is bound to be a great demand for industrial goods and
building materials. He added that Kenyan manufactures of cement, steel, and
industrial goods would benefit more because of their proximity to the country.
Some manufactures have already begun the scramble for the markets in earnest.
East African Portland Cement, for instance, is soon setting up shop at the
border post to cash in on the construction bonanza that is expected set to grip
Southern Sudan.
"Sudan is among the emerging markets we are targeting," says Mr David Mainge,
EAPC's corporate affairs manager.
"We are soon moving to the region to capitalise on the reconstruction
programmes expected to take off. And the earlier we set up base the better."
Mainge added that business prospects look brighter in Sudan than anywhere else
in the region, and the cement maker is focusing on the long term.
He said: "Our mission is to have a milling plant in the southern Sudanese town
of Rumbek within the next five years. This will allow us to produce in large
volumes for the vast market and at the same time cushion the firm against high
transport costs."
Besides the building industry, consumer goods manufacturers are expected to
reap profits from a peaceful Sudan.
Currently, Sudan, especially the southern region, relies heavily on Kenya for
consumer goods, and with peace trade is expected to reach new heights.
"Very soon Sudan will rank second after Uganda as the net importer of Kenyan
commodities," asserted Ruhui, pointing out that more employment opportunities
would arise as most firms are likely to scale up their production to meet the
extra demand.
Given Kenya's excellent infrastructure and a better economic environment
compared to its neighbours, international investors interested in Sudan would
set up base in Kenya, a financial analyst with the Institute of Policy Analysis
and Research, Muyundo Masinde, says.
In addition to offering investments opportunities, peace in Sudan will somewhat
boost security in the region.
The deterioration of security in most parts of Kenya is attributable to the
proliferation of small arms from unstable countries such as Sudan.
And with the newfound peace, prospects of reduced crime levels are looking up.
"Security is a prerequisite for any meaningful business to flourish," says
Masinde, adding that the insecurity witnessed in the country has scared away
investors.
Masinde observed that the firms that have opted to stay have been compelled to
spend heavily on security, thus denting their revenues.
However, despite the optimism, sustainable security and the dilapidated
infrastructure remains a challenge to the many entrepreneurs.
"Infrastructure is poor and trying to reach the new markets may prove a bit
daunting," says Ruhui.

   

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