Growing trade volumes have attracted multi-billion Shilling investments in Kenya’s transport and logistics industry in the past three years, opening a turf war between local and international firms seeking a share of the growing business.
Investors have spent more than Sh8 billion since 2008 to buy out local courier firms, set up cargo handling facilities and airline freight routes targeted at the Kenyan market, which also serves as a gateway to the region.
Kenya Airways, SAUDI Airlines Cargo Company, Aramex, Transglobal Cargo Centre, Swissport Cargo Services and DHL are among the big players in the logistics business planning or have rolled out new investments in the sector over the past one year.
In February, Dubai-based logistics firm Aramex acquired two Kenyan courier firms — In-Time Couriers and One World Courier — at an estimated cost of Sh2.3 billion, according to Cairo-Based investment bank Alembic HC. One World Courier offers international courier services while In-Time focuses on local deliveries.
Aramex is betting on the two firms to grow its foothold in the local and regional logistics market.
“These two acquisitions in Kenya position Aramex to introduce its full suite of products and services to the wider East Africa region,” said Mr Hussein Hachem, Aramex CEO for Middle East and Africa in a statement.
Transglobal Cargo Centre, partly owned by Andy Forwarders, recently completed a Sh1.9 billion cargo storage and handling facility at the Jomo Kenyatta International Airport.
The facility, which handles 80 per cent of the 300,000 tonnes of cargo warehoused at JKIA per year, mainly targets fresh produce exporters, including flower, fruit and vegetable growers who sell the bulk of their products to European markets.
Swissport Cargo Services also completed a Sh1 billion warehouse at JKIA last year with a capacity of up to 150,000 tonnes per year.
After a long absence, Saudi Airlines Cargo Company made a return to JKIA last December targeting cargo business from the Far and Middle East to Nairobi where it will pick up flower exports.
National carrier Kenya Airways has also announced plans to acquire its first cargo plane with a 19-tonnes per trip capacity in September, targeting cargo volumes from Asian markets.
“There has been growth in cargo to and from the Asian routes and new commodities like meat headed for the Middle East,” Sauda Rajab, the general manager at the airline told Cargo News.
Global logistics firm DHL has announced plans to start a road cargo transport service linking Kenya and Southern African countries, targeting delivery of durable goods like electronics, medicine and textiles.
Aramex said the acquisitions were motivated by the size of Kenya’s economy and its regional transport hub status.
The growing cargo volumes coming into or leaving Kenya through the airports and sea ports is providing a huge opportunity for players in the freight, storage, distribution and clearing and forwarding market. Mr Freddie Karura, the chief operations manager at Transglobal Cargo Centre said Kenya’s status as a regional investment and transport hub is also a major pull factor for the new investments.
