1
A
GLOBAL/COUNTRY STUDY REPORT
ON
“KENYA”
Submitted to
Christ Institute of Management
IN PARTIAL FULFILLMENT OF THE
REQUIREMENT OF THE AWARD FOR THE DEGREE OF
MASTER OF BUSINESS ASMINISTRATION
In
Gujarat Technological University
UNDER THE GUIDANCE OF
Mr. Bhuvan Dave
Assistant Professor
Christ Institute of Management
Affiliated to Gujarat Technological University
Ahmedabad
April, 2012
2
INDEX
Sr. No Particulars Page No.
1. Demographic Profile of the Kenya 3
2. Economic Overview of the Kenya 6
3. Overview of Industries Trade and Commerce 9
4. Overview Different economic sectors of Kenya 12
5. Overviews of Business and Trade at International
Level
15
6. Present Trade Relations and Business Volume of
different products with India
18
7. PESTEL Analysis 21
8. A Study of Automobile sector with reference to Kenya
Vehicles Manufactures Limited.
24
9. A Study of Rea Vipingo Limited 41
10. A Study of Tea Industry with reference to Kenya Tea
Packers
60
11. A Study of Opportunities in Agriculture & Cultivation
Industry
72
12. A Study of Tea Industry in Kenya 91
13. A Study of Power Generation Market 114
14. A Study of Bamburi Cement Limited
138
3
Partial Submission of Global country study ( 2830003)
Country Selected: Kenya
College Code : 789
College Name: Christ Institute of Management
Faculty guide : Mr. Bhuvan Dave
Facult e-mail : [email protected]
DEMOGRAPHIC PROFILE OF KENYA
4
SUMMARY OF DEMOGRAPHIC PROFILE
Reports of any inhabitants based upon variables for instance era, ethnic
background, sexual, monetary standing, education level, cash flow levels along with job,
and the like. Demographics are widely-used by simply governing bodies, organizations
along with non-government companies to some sort of population's attributes for most
requirements, which include insurance policy growth along with monetary general
market trends. Change in factor listed above are play very important role in any economy.
Changes in size of demographic factors result in change in economic environment,
political environment and culture.
Demographic trends are also important, as the size of different demographic
groups will change over time as a result of economic, cultural and political circumstances.
Population
41,070,934 (July 2011 est.)
Age structure
0-14 years: 42.2% (male 8,730,845/female 8,603,270)
15-64 years: 55.1% (male 11,373,997/female 11,260,402)
65 years and over: 2.7% (male 497,389/female 605,031) (2011 est.)
Median age
Total: 18.9 years
male: 18.8 years
female: 19 years (2011 est.)
Population growth rate
2.462% (2011 est.)
5
Birth rate
33.54 births/1,000 population (2011 est.)
Death rate
8.93 deaths/1,000 population (July 2011 est.)
Urbanization
Urban population: 22% of total population (2010)
rate of urbanization: 4.2% annual rate of change (2010-15 est.)
Sex ratio
At birth: 1.02 male(s)/female
under 15 years: 1.01 male(s)/female
15-64 years: 1.01 male(s)/female
65 years and over: 0.83 male(s)/female
total population: 1.01 male(s)/female (2011 est.)
Size
The total area of 582,650 square kilometers (somewhat larger than France) includes
13,400 square kilometers of water, mainly in Lake Turkana (also known as Lake Rudolf) and
Kenya’s portion of Lake Victoria.
Land Boundaries
Kenya’s land boundaries total 3,477 kilometers.The country is bounded by Ethiopia
(861 kilometers), Somalia (682 kilometers), Sudan (232 kilometers), Tanzania (769 kilometers),
and Uganda (933 kilometers).
6
A
Global Country Report
On
“Economic Overview of Kenya”
Country Selected: Kenya
College Code : 789
College Name : CHRIST INSTITUTE OF MANAGEMENT
Faculty Guide: Asst.Prof. Meera Mody
Faculty’s Email: [email protected]
7
Overview
The actual macroeconomic overall performance from the Kenyan economic climate
enhanced considerably this year in contrast to this year. As the economic climate
increased through second . 6% last year, approximately the expansion price associated
with low household item (GDP) almost bending to achieve five. 0% this year. The rise
within development could be related to the great rainwater throughout the year 2010 as
well as greater costs with regard to Kenyan export products upon globe marketplaces. The
actual large quantity associated with farming outcome, along with improved competitors
in certain crucial solutions, assisted consists of monetary inflation this year. Still the actual
Kenyan economic climate encounters 2 difficulties: diversity and also the decrease of
reliance on the actual inconsistencies associated with character.
Recent Economic Developments and Prospects
Kenya’s principal seeds, that is maize, chili, oranges along with herbal tea, saved important
improves throughout manufacturing in fact. Nonetheless horticultural merchandise, coffee
beans along with sugarcane saved decrease numbers of end result along with move in fact
in comparison with last year. Airline flight termination due to volcanic eruption
throughout Iceland, too little rain along with despondent desire via Kenya’s classic
blossom niche categories the worse for with the world-wide economic recession are
generally on the list of principal issues encountered by simply Kenya’s horticulture export
products in fact. Subsequently, horticultural export products expanded merely somewhat,
by simply three or more. 7%, when horticultural manufacturing enhanced by simply your
five. 7%.
Structural Issues
Private Sector Development
The excellent functionality on the Kenyan financial system plus the slow restoration on the
world-wide financial system in fact contributed to typically the board throughout stock trading
pursuits with the Nairobi Bourse (NSE). Typically the NSE thirty talk about listing flower by
simply 56% involving October last year along with August the new year.
8
Various other The latest Trends Typically the 2010/11 finances emphasises lawn along with
country growth, throughout identification involving agriculture’s key side of the bargain for you
to GROSS DOMESTIC PRODUCT (23%), in addition to job along with export products.
Typically the strategy’s principal aims are going to safeguarded livelihoods throughout country
regions and be sure foodstuff safety measures along with job.
Political Context
Typically the disorders on the 07 elections brought on some sort of say involving brutalité
over the state. Throughout 2008, some sort of power-sharing commitment ended up being
agreed upon involving Chief executive Kibaki plus the other. Throughout The spring 2008,
some sort of 42-member ligue pantry ended up being sworn for the reason that bundled
brand-new ministries intended for cooperative growth, N . Kenya growth along with
Nairobi metropolitan growth. Some sort of change schedule ended up being portion of the
power-sharing commitment. The essence typically the constitutional change is usually to
enhance the potency of the program involving controls. Typically the Constitutional
Assessment Work involving 12 , 2008 presented the cosmetic penning. That kicks off in
august the new year, Kenyans selected as with a referendum to the brand-new cosmetic.
Typically the cosmetic got wide-ranging assist along with ended up being allowed by 66.
9% on the arrêters
.Social Context and Human Resource Development
Modest progress has been made towards achieving most of the Millennium Development Goals
(MDGs). The country is considered off-track when it comes to eradicating extreme poverty
(MDG 1) by 2015 though the percentage of population below the poverty line did drop from 56.
0% in 2000 to 46. 9% in 2008/09. High inflation rates between 2003 and 2009 have eroded the
purchasing power of the population, dramatically affecting the poor and most vulnerable.
Persistent poverty and unemployment, particularly among youth, remain major challenges.
Kenya’s Human Development Index (HDI), where 0 is the lowest score and 1 the highest, has
increased from 0. 464 in 2009 to 0. 470 in 2010, compared with 0. 389 in sub-Saharan Africa
and 0. 624 in the world. The country belongs to the group of those where human development is
low ranking, 128th out of 169 countries. The Youth Development Index (YDI) evaluates the
degree of inclusion and social integration of youth in education, health and income. Kenya’s
YDI is slightly above its HDI at 0. 5817 in 2009. Looking at the composition of this index,
income appears to be the major challenge with Kenya’s Youth Income Index at 0. 44.
9
Partial Submission of ―Global Country Study‖ (2830003)
Semster-3
Country selected: Kenya
College code: 789
College : Christ Institute of Management
Faculty Guide: Mr. Alex Daniel
Faculty‘s Email: [email protected]
“OVERVIEW OF INDUSTRIES TRADE AND COMMERCE”
10
Agriculture
seventy-five per cent regarding functioning Kenyans produced their particular existing
around the terrain. Agriculture will be the next greatest contributor to be able to
Kenya‘s GDP as soon as the services industry. The key funds plants are usually tea
and coffee. Huge probability of culture according to rain fall as well as the remarkable
variations in the rates regarding farm goods.
Forestry and Fishing
Resource degradation has reduced output from forestry. Fisheries are of local
importance around Lake Victoria and have potential on Lake Turkana Kenya‘s total
catch reported in 2010 was 128,000 metric tons. Output from fishing has been
declining because of ecological disruption. The uses of unauthorized fishing equipment
have led to falling catches and have endangered local fish species.
Mining and Minerals
Kenya has no significant mineral endowment. Kenya‘s mineral production in 2010
reached more than 1 million tons. One of Kenya‘s largest foreign-investment projects in
recent years is the planned expansion of Magadi Soda.
Manufacturing
Despite the fact that Kenya is one of industrially produced region inside Eastern side
Cameras, producing continue to is liable for simply 13 per cent regarding major home-
based product or service (GDP). Extension in the industry following freedom, in the
beginning fast, provides stagnated considering that the nineteen-eighties, hampered
simply by shortages inside hydroelectric, main stream15142 fees, dilapidated transfer
structure as well as the dropping of cheap imports Professional exercise, centered
across the the canaries largest city facilities, Nairobi, Mombasa and also Kisumu will
be decided simply by food-processing sectors like materials milling, ale generation, and
also sugarcane killer, as well as the manufacture regarding buyer items.
11
Energy
The largest share of Kenya‘s electricity supply comes from hydroelectric stations at
dams along the upper Tana River as well as the Turkwel Gorge Dam in the west.
Kenya‘s installed capacity stood at 1,142megawatts a year between 2001 and 2003.
Tax and other concessions are planned to encourage investment in hydroelectricity
and in geothermal energy in which Kenya is a pioneer. Petroleum accounts for 20 to 25
percent of the national import bill. Kenya Petroleum Refineries—a 50:50 joint venture
between the government and several oil majors—operates the country‘s sole oil
refinery in Mombasa, which currently meets 60 percent of local demand for petroleum
products.
Tourism
Kenya‘s services sector, which contributes about 63 percent of GDP, is dominated
by tourism. The tourism sector has exhibited steady growth in most years since
independence and by the late 1980s had become the country‘s principal source of
foreign exchange. Tourism is now Kenya's largest foreign exchange earning sector,
followed by flowers, tea, and coffee. In 2006 tourism generated US$803 million, up
from US$699 million the previous year.
Overview of Kenya`s Trade policy
Kenya's general trade policy objectives are economic management for renewed
growth.
Trade policies in Kenya‘s primary objective is the promotion of exports of
consumer and intermediate goods, while at the same time laying the base for
eventual production of capital goods for both domestic and export markets.
The Government has put into place various incentives such as:
The duty and VAT remission;
Manufacturing under bond scheme;
Export processing zones.
a. Agriculture.
b. Manufacturing Industry
c. Trade Policy Implementation
12
Partial Submission of “Global Country Study” (2830003)
Semster-3
Country selected: kenya
College code: 789
Faculty Guide: Mr. Dhaval Motwani
Faculty’s Email:[email protected]
OVERVIEW OF DIFFERENT ECONOMIC SECTORS OF KENYA
13
OVERVIEW OF DIFFERENT ECONOMIC SECTORS OF KENYA
Economy
With regards to 72% involving Kenyans are generally engaged in harvesting, generally on the
subsistence variety. Coffee beans, herbal tea, corn, wheat or grain, sisal, along with pyrethrum
are generally cultivated from the highlands, mostly about smaller African-owned plants
produced by simply splitting up many of the significant, earlier European-owned large homes &
acres. Coconuts, pineapples, cashew insane, silk cotton, along with sugarcane are generally
cultivated from the lower-lying regions.
Agriculture
lawn care segment consistently command Kenya’s economic system, while solely 18 per-cent
connected with Kenya’s full area place features ample in addition to bad weather for being
farmed, then 6 as well as main per-cent is usually categorised seeing that vivid area. In 2006
pretty much 70 per-cent connected with performing Kenyans manufactured all their dwelling
for the area, weighed against 80 percent with 1980. In relation to one-half connected with full
lawn care production is definitely non-marketed subsistence development. Agronomie is a
secondly major contributor to help Kenya’s yucky local solution, once the provider segment.
Industry and manufacturing
Though Kenya is among the most industrially designed state throughout Far east Photography
equipment, making nonetheless makes up merely 12 pct involving uncouth home merchandise
(GDP). This kind of a higher level making GROSS DOMESTIC PRODUCT presents simply a
moderate enhance considering that self-sufficiency. Development on the market soon after self-
sufficiency, originally speedy, possesses stagnated since eighties, affected by simply shortages
throughout hydroelectric electrical power high energy charges, dilapidated move commercial
infrastructure, plus the getting rid of of inexpensive imports. Nonetheless caused by
urbanization, the automotive market along with making important are getting to be significantly
crucial that you typically the Kenyan financial system, and contains also been returned by
simply a rising GROSS DOMESTIC PRODUCT each household.
Energy
The most important talk about involving Kenya’s electric power offer derives from
hydroelectric programs with ravage down the uppr Covo Sea, plus the Turkwel Mountainous
Dam in the west. Kenya possesses still to get hydrocarbon stored about their location, inspite of
numerous generations involving spotty query. Though Quotes remains typically the look for off
14
of Kenya’s coast, Kenya at present imports most unsavory oil demands. Oil makes up thirty for
you to 25 percent on the country wide transfer invoice. Kenya Oil Refineries-a 60: 60
partnership amongst the govt many olive oil majors-operates typically the country’s exclusive
olive oil refinery throughout Mombasa, which often at present fits 58 pct involving community
require oil merchandise. In 2004 olive oil ingestion ended up being believed with fityfive, 000
barrels (8, 800 m3) every day. A lot of the Mombasa refinery’s manufacturing is usually sent by
using Kenya’s Mombasa-Nairobi conduite.
Financial services
Kenya is definitely Distance in addition to Middle Africa's link to get Fiscal expert services.
Often the Nairobi Stock Exchange (NSE) is definitely graded last with If you have with regard
to Sector increased. Often the Kenya business banking method is administered by Middle
Standard bank connected with Kenya (CBK). Nowadays September 2004, the training course
consisted of 43 professional finance institutions (down by twenty four with 2001), various non-
bank loan companies, like home finance loan corporations, some enough cash in addition to
college loan romantic relationships, and lots of ranking foreign-exchange credit reporting
agencies. A pair of often the some major finance institutions, often the Kenya Professional
Standard bank (KCB) along with the State Standard bank connected with Kenya(NBK), usually
are moderately government-owned, along with the different a couple usually are the vast
majority foreign-owned (Barclays Standard bank in addition to Typical Chartered). The vast
majority of quite a few small finance institutions usually are family-owned in addition to –
operated
Tourism
Kenya’s expert services segment, which will gives in relation to 63 per-cent connected with
GDP, is definitely centered by means of vacation. Often the vacation segment features
established continuous growing in the majority of several years due to the fact liberty and by
often the delayed 1980s came into existence often the country’s law method.
Forestry and fishing
Source of information wreckage includes lessened productivity out of forestry. In year
2004. Yet , productivity out of sport fishing may be turning down owing to
environmentally friendly of your. Co2, overfishing, as well as using of suspicious sport
fishing machines currently have brought about going down assaults and now have
endangered area the fish race
15
Partial submission of “Global Country Report”(2830003)
Semester-3
Country Selected: Kenya
College Code:789
College Code: Christ Institute of Management, Rajkot
Faculty Guide:- Asst.Prof.Nishant Mehta
OVERVIEW OF BUSINESS AND TRADE AT INTERNATIONAL LEVEL
16
OVERVIEW OF BUSINESS AND TRADE AT INTERNATIONAL LEVEL
Introduction
The need for formulation of a National Trade Policy is founded on a notion that promoting
trade is key to Kenya’s development in an environment characterized by rapid technology and
progress and globalization. The intensification of competitive pressures in liberalized regimes,
also make it more important to mount a trade policy.
After independence, Kenya’s trade efforts were mainly guided by import substitution
strategy. The Sessional Paper No. 10 of 1965 mainly centered on trade development and
pursued enhanced protection of the domestic market to help develop industries. The Policy was
a key influence on the development of trade regime in Kenya over the first decade from
independence. The objectives of the Strategy were; rapid growth of trade, easing balance of
payment pressure, increased domestic control of the economy and generation of employment.
Trade Liberalization: Structural Adjustment Policies (SAPs-1980s)
The SAPs were introduce in the early 1980s to address the Structural rigidities price
instability and macro-economic imbalances that had become embedded in the economy and led
to poor delivery of services by the public sector. The main thrust of the adjustment programme
was to effect a shift from a highly protected domestic market to a more competitive
environment that would facilitate increased use of local resources, outward oriented policies
that would promote employment creation and export expansion.
Export Oriented Policies – 1990s
These policies were embodied in the Sixth Development Plan (1989-1993) which provided
a policy framework for adoption of export promotion strategy centered on creation of an
enabling environment for export growth. This was to be achieved through institutional reform,
reduction and restructuring of tariffs, abolition of export duties, introduction of export retention
schemes, improvement of foreign exchange and insurance regulations and the establishment of
the National Export Credit Guarantee Coorporation.
17
Trade Policy Making in Kenya and Main responsibility
The Office of the Deputy Prime Minister and Ministry of Trade takes the lead role in trade
policy making process in the country. For instance, the National Export Strategy (NES) and
the Private Sector Development Strategy (PSDS0, the two trade policy documents demanded by
“Economic Recovery Strategy for Wealth and Employment Creation (ERS) were accordingly
formulated in the Office of the Deputy Prime Minister and Ministry of Trade. The two
documents identifies strategic sectors and set out a road map that would help the country build a
strong and thriving private sector in Kenya.
Trade Policy Announcement
Goal 1: Improving Kenya’s business environment;
Goal 2: Accelerating institutional transformation within the public sector;
Goal 3: Facilitating growth through greater expansion of trade;
Goal 4: Improving the productivity of enterprises; and
Goal 5: Supporting entrepreneurship and indigenous enterprise development.
The formulation of the draft trade policy document which is about to be finalized is being
supported and funded Goal 3.
Conclusion
Since independence Kenya has never had a clear and well structured trade policy document.
The trade policies as contained in various government documents makes it cumbersome to
interpret them and also difficult to be understood by the outside world. This in turn has had an
adverse effect on investment. Every effort has now been made and the first trade policy
document is expected to be rolled out by early next year.
18
Partial submission of “Global country study” (2830003)
Semster-3
Country Selected: Kenya
College Code: 789
College code: Christ Institute Of Management
Faculty Guide: Prof. Megha Mody
PRESENT TRADE RELATION AND BUSINESS VOLUME WITH DIFFERENT
PRODUCT WITH INDIA.
19
PRESENT TRADE RELATION AND BUSINESS VOLUME WITH DIFFERENT
PRODUCT WITH INDIA.
The East African coast and the west coast of India have long been linked by voyages of
merchants. India was among the first countries to establish an office in Kenya. The Indian
Diaspora in Kenya has contributed actively to Kenya’s progress. Many Kenyan have studied in
India. In recent times, there is a growing trade (US$ 1.5 billion in 2010) and investment
partnership. Indian firms have invested in telecommunications, petrochemicals and chemicals,
floriculture, etc. and Indian firms have executed engineering contracts in the power and other
sectors.
An India-Kenya Trade Agreement was signed in 1981, under which both countries
accorded Most Favoured Nation status to each other. The India-Kenya Joint Trade Committee
(JTC) was set up at Ministerial level in 1983 as a follow-up to the Agreement.
Review of Bilateral Trade:
Both sides reviewed the developments in their bilateral trade and noted that the volume
of bilateral trade has shown remarkable growth since 2005-06. Bilateral Trade has grown from
US $ 625 million in the year 2005-06 to US $ 1,530 million in 2009-10, registering a growth of
145 % in the last 4 years. India’s exports to Kenya have increased from US $ 576 million in
2005 - 2006 to US $ 1,452 million in 2009- 2010. Similarly, India’s imports from Kenya also
rose from US $ 48 million in 2005 -06 to US $ 79 2009- 2010. There is tremendous potential
for further diversifying and million in expanding the bilateral trade between both countries.
Trade in the field of Power & Energy
There is a huge potential for development of Power Sector in Kenya and Bharat Heavy
Electricals Ltd. (BHEL) would like to reiterate its interest in getting associated in Power
Development Plan of Kenya.
BHEL is willing to explore the possibility of setting up of a Power Transformers
manufacturing Plant in Joint Venture mode with Govt. of Kenya. Ministry of Energy, Kenya is
requested to provide the estimated requirement of Power Transformers in Kenya as well as in
neighbouring countries, EAC/COMESA in next 20-25 years along with proposed
guidelines/incentives for the plant so that BHEL can consider the same.
20
The tabulation below shows the trend in Kenya’s total trade with India
Trade between India And Kenya
Trade between India and Kenya is likely to rise by 20-25 percent this year after growing
23 percent in 2010.Turnover between the two was worth $1.41 billion in 2010, heavily titled in
India's favor.Kenya exported commodities worth $107.1 million and imported $1.3 billion
worth of Indian goods. The figures do not reflect services.
India exports a wide variety of goods such as vehicles, motorbikes and pharmaceutical
products to Kenya, while the east African country exports mainly soda ash, mined by the Indian
conglomerate Tata Group.Other Indian companies with operations in Kenya are Bharti Airtel,
Essar Group, which has an equity interest in the country's sole refinery and the smallest mobile
phone operator that trades as yu.
India's Exim Bank has extended a $61.6 million loan to Kenya for the expansion and
repair of the national electricity transmission network. Tripathi said he saw investment
potential in the healthcare, education and tourism sectors for Indians interested in the African
nation. India offers 101 fully funded scholarships for Kenyans annually to train in technical
skills in sectors such as ICT, engineering, forestry, and the commissioner said his government
had added 25 more for training in agriculture.
PartialSubmissionof“GlobalCountryStudy”(2830003)Semster-3
Details
Year 2006
Year 2007
Year 2008
Kenya’s Total Trade with India 0.572 0.927 1.419
India's %age Share in Kenya’s Total Trade 5.33 7.09 7.67
%age Growth Over Previous Year 49.35 62.06 53.07
Kenya’s Total Imports from India 0.52 0.84 1.32
India's %age Share in Kenya’s Total Imports 7.19 9.34 10.33
%age Growth Over Previous Year 57.58 61.54 57.14
Kenya’s Total Exports to India 0.05 0.08 0.09
India's %age Share in Kenya’s Total Exports 1.49 2.13 1.73
%age Growth Over Previous Year -1.88 67.31 13.79
21
CountrySelected:Kenya
CollegeCode:789
CollegeCode:Christ Institute of Management
Faculty Guide: MiteshDadhania
Faculty’s Email: [email protected]
PESTLE ANALYSIS
22
PESTLE ANALYSIS
PESTLE is an analytical tool which considers external factor sand helps you to think about their
impacts. It is a useful tool for understanding the “big picture” of then vironmentin which you
are operating .By understanding your environment, you can take advantage of the opportunities
and minimize the threats. This provides the context within which more detailed planning can
take place to take full advantageoftheopportunities that present themselves.
The factors in PESTLEAnalysis:
Political:
Government type and stability
Freedom ofthepress, ruleoflaw and levels ofbureaucracyand corruption
Regulation and de-regulation trends
Social and employment legislation
Taxpolicy,and trade andtariff controls
Environmental and consumer-protection legislation Economic:
Stageofabusiness cycle
Current and projected economicgrowth, inflation and interest rates
Unemploymentand supplyoflabor,Laborcosts
Levels ofdisposableincome and incomedistribution
Likelyimpact oftechnological orotherchanges on the economy
Likelychanges in theeconomic environment Sociological:
Cultural aspects, health consciousness, population growth rate,agedistribution,
Organizational culture, attitudes to work, management style, staff attitudes
Education, occupations, earningcapacity, livingstandards
Mediaviews, lawchanges affectingsocial factors,trends, advertisements, publicity
Demographics: age,gender, race, familysize Technological:
Maturity oftechnology,competingtechnologicaldevelopments,researchfunding,
technologylegislation, new discoveries
Information technology,internet, global and localcommunications
Technology access, licensing, patents, potential innovation, replacement
technology/solutions,inventions,research,intellectualproperty issues,advancesin
manufacturing
Transportation,energyuses/sources/fuels,associated/dependenttechnologies,ratesof
obsolescence, wasteremoval/recycling
23
Legal:
Current homemarket legislation, futurelegislation
European/international legislation
Regulatorybodies and processes
Environmental regulations, employment law,consumerprotection
Industry-specific regulations, competitive regulations
Environmental:
Ecological
environmental issues, environmental regulations
customervalues, marketvalues, stakeholder/ investorvalues
management style, staffattitudes, organizational culture, staff engagement
Kenyan Culture Overview:
Official Name – RepublicofKenya
Head ofState – MwaiKibaki
Population – 40 million*
OfficialLanguages – English, Kiswahili
Currency – KeyanShilling
Capital City – Nairobi
24
SUMMARY OF GLOBAL/COUNTRY STUDY
AUTOMOBILE SECTOR OF KENYA WITH REFERENCE TO KENYA
VEHICLES MANUFACTURES LIMITED
Gross Domestic Product (GDP)
5 years ago nation Kenya‘s GROSS DOMESTIC PRODUCT had been going to
US$17. 39 billion dollars. For each household Low Household Item (GDP) typical
fairly a lot more than US$450 yearly. Within the buying energy parity conditions, for
each household associated with GROSS DOMESTIC PRODUCT back in 2006 had
been going to US$1, two hundred. The actual country‘s actual GROSS DOMESTIC
PRODUCT development indexed towards the second . three percent at the begining
of yr 04 and also to almost six %in the entire year 2006 as well as 2006, in contrast
to the slow one four percent back in the year 2003 as well as all through Leader
Daniel Arap Moi‘s final phrase regarding yr 1997–2002. Actual Low Household Item
(GDP) is actually likely to still the actual enhance, mostly due to the growth within the
tourist, telecoms, transportation, as well as building as well as recuperation within
the farming. The nation Kenya Main Financial institution prediction from the yr 3
years ago is actually among 6 to 7 percent Low Household Item development.
25
Introduction of Automobile Industry of Kenya
The car business in the unitedstates Kenya is principally active in the store as well
as submission associated with automobiles. A few many car sellers within the nation
Kenya, most abundant in a fact becoming Cooper Electric motor Company, Toyota
(East Africa), Common Engines, DT Dobie as well as Simba Colt. Addititionally there
is 3 automobile set up flower in the united states Kenya, that focuses on the actual
collecting associated with pick ups as well as weighty industrial automobiles.
The actual set up sellers encounter difficult competitors through brought in second-
hand automobile, primarily through the nation The japanese as well as Usa Arabic
Emirates. These types of imports accounts from the about 70 percent from the
marketplace. The final yr see a substantial reject within the amount of brand new
automobiles market in the united states. There have been a continuing recuperation
within the last four many years, however the figures achieve nevertheless drop much
lacking the actual figures documented last year. 7 years ago, the key car businesses
are documented product sales associated with about nine, 979 models. Whilst 27%
more than previous yr, this really is nevertheless powerful amounts accomplish
within the earlier yr 1990‘s.
The actual recession within the amount of brand new vehicles market is actually
attributable the actual exceptional competitors through second-hand automobiles
and also the lower financial environment.
The nation Kenya Electric motor Business Organization (KMI), the actual use
outsourcing for kind of the organization individuals within the electric motor business,
continues to be reception challenging invert for this tendency. A few of the steps
possess assisted the pass though the lower justification in the entire year 2150,
whenever just five, 869 models had been offered. On the component, the businesses
have grown to be much more innovative within react to client specifications.
26
Company Profile
INCORPORATION
Incorporated in the Country Kenya as Leyland Kenya Limited on the date of 2nd July
1974.
Through a Special Resolution of the Shareholders of the Company changed its
name on the date of 16 th May, 1989 to ―Kenya Vehicle Manufacturers Limited‖.
SHAREHOLDING
Kenya Government 35%
CMC Holdings Limited 32.5%
D.T.Dobie & Co (K) Ltd 32.5%
FIRST
KVM was one of the first vehicle assembly plant to be incorporated in Kenya.
PRODUCTION
Began creation back in 1976 along with very first automobile advancing from the
manufacturing plant within the 30 days Aug, 1976. Cumulative creation because starting
appears in around sixty, 000 automobiles. The rose had been initial style to create lighting as
well as weighty industrial automobiles consist of Variety Rovers, Property Rovers, Leyland
vehicles as well as Busses, Fiat, Microbuses,.
The car product range generate in the nation KVM offers improve through the years as well
as appears in eleven. The product range these days consists of Mazda, Property Rover,
Machine Collection, Mercedes as well as Iveco.
27
Automobile Industry India
The Automobile Industries are producing over the 11 million vehicles and exporting
around 1.5 million every year. The dominant product of the industries is two wheeler
with a market share of the over 75% and passenger car with a market share of about
16%. Commercial vehicle and three wheeler shares about 9% of the market between
them. About 91% of the vehicle sell are used by households and only about 9% for
commercial purpose. The industries have attained a turnover of the more than USD
35 billion and provide direct and indirect employment to more than 13 million people.
Note that, with a high cost of development production facilities, limited convenience
to newer technology and towering competition, the barriers to enter the Indian
Automotive sectors are high and these barriers are learning. On the other side, India
having well-developed tax structure. The power to levy taxes and duties are
distributed among the three tiers of the Government. The cost structures of the
industries are fairly traditional, but the profitability of motor vehicle manufacturers
have been rising over the past five years. Major players, like Maruti Suzuki and Tata
Motors have material cost of about the 80% but are recording profits after tax of
about the 6% to 11%.
The level of technology changes in the Motor vehicle Industries have been high but,
the rate of change in the technology has been average. Investment in the
technology by the producers has been soaring. System-suppliers of the integrated
works and sub-systems have become the arrangement of the day. However, further
investment in the new technology will help to the industry be more competitive. Over
the past few years, the industries have been unstable. Currently, country India‘s
increasing per capita non-refundable income which is expected to rise by the 106%
and the year 2015 and growth in exports is playing a major roles in the increase and
competitiveness of the industry.
Tata Motors is leading the commercial vehicle section with a market share of the
about to 64%. Maruti Suzuki is leading the passenger vehicle part with a market
share of the 46%. Hyundai Motor India and Mahindra and Mahindra both are focus
expanding their footprint in the out of the country market. Hero Honda Motors is
28
occupy over the 41% and sharing 26% of the 2 wheeler market in the country India
with Bajaj Auto. Bajaj Auto in itself is occupying about the 58% of the three wheeler
market.
Customer is very important of the survival of the Motor Vehicle manufacturing
industry. In the year 2008-09, customer response drop, this burned on the increase
in the demand of cars. Steel is the major part input used by manufacturers and the
increase in the price of steel is put a cost pressure on manufacturers and cost is
receiving transferred to the end of the customer. The price of oil and petrol affect the
driving habits of customers and the type of car they buy in the market.
The key of the success in the industries are to improve labor productivity, capital
efficiency and labor flexibility. Have an quality manpower, infrastructure
improvement, and raw material availability also play a major role. Access to most
recent and one of most efficient technologies and techniques will taken competitive
advantage to the major of the players. Utilizing manufacture plants to the best
possible level and understand the implication from the country government policies
are the basic in the Automotive Industries of the country the India.
Both, The Industry and The Indian Government are compelling to intervene for the
India‘s automotive industries. The Country Indian government should to facilitate,
create approving and predictable of the business environment, infrastructure
formation, to attract investment and promote researched and development. The role
of the Industries will mainly to be in designing and to manufacture the product of
superlative quality establish cost competitiveness and to improve efficiency in labor
and in the capital. With a joint and proper effort, the India‘s automotive industry will
surely emerge as the objective of alternative in the world for design and to
manufacture of automobile.
29
Top Automobile companies in India
Vehicle sectors are usually prosperous in this particular one hundred year. The
indian subcontinent will be the one of many important participants inside the global
motor vehicles industry.
Bajaj Automobile Ltd:
Bajaj Automobile Ltd. will be the industry head in the vehicle organizations inside the
The indian subcontinent. The particular Bajaj Group's front runner business} will be
the Bajaj Automobile Ltd.
Hero MotoCorp Ltd:
The organization may be the consequence of the actual loan consolidation among
Japan Toyota Engines Organization} as well as India's Leading man Toyota Team
within 93.
Mahindra & Mahindra Limited:
This particular car organization} is really a part associated with Mahindra Team. The
organization focuses on automobiles for your common objective power. This rates
tenth one of the greatest personal field businesses within Indian.
Maruti Suzuki India Ltd:
Maruti Suzuki may be the organization} that has brought in trend in the market
associated with Indian native car. It does not take consequence of the actual proper
connections associated with Japan's Suzuki as well as Maruti
Tata Motors:
At first phase associated with Nodriza the referred to as Telco, Nodriza Engines is
among the biggest production organization} of economic automobile within Indian
which is additionally among the biggest personal restricted organization
30
Hyundai Motor India Ltd:
Hyundai Electric motor limited is really a subwoofer label of the actual Hyundai
Engines Organization}. This is a Southern Korean language multiple nationwide
organization}.
Hindustan Motors:
Hindustan Engines is among the top producer of electrical Engines within Indian. It
does not take very first Vehicle Organization} associated with Indian that
experienced begin the actual production procedure for vehicles within Indian back in
1942.
TVS Motors
Within the 2 wheeler business TELEVISIONS Engines is quite more suitable title.
The very first 2 seater moped had been Released at this time organization} within
Indian.
Ashok Leyland:
It does not take 2nd main crucial gamer one of the industrial automobiles within
Indian. The organization companies Vestible busses, Haulage automobiles, 18-82
seater solitary as well as dual decker busses and so on The actual 6 production
models from the organization} can make seventy seven, 000 automobiles each time.
31
Automobile Production Trends (Number
of
Vehicles)
Category 2004-
05
2005-
06
2006-07 2007-08 2008-09 2009-10 2010-11
Passeng
er
Vehicles
1,209,8
76
1,309,3
00
1,545,22
3
1,777,58
3
1,838,59
3
2,357,41
1
2,987,29
6
Commer
cial
Vehicles
353,70
3
391,08
3
519,982 549,006 416,870 567,556 752,735
Three
Wheeler
s
374,44
5
434,42
3
556,126 500,660 497,020 619,194 799,553
Two
Wheeler
s
6,529,8
29
7,608,6
97
8,466,66
6
8,026,68
1
8,419,79
2
10,512,9
03
13,376,4
51
Grand
Total
8,467,8
53
9,743,5
03
11,087,9
97
10,853,9
30
11,172,2
75
14,057,
064
17,916,
035
[Source: Society of Indian Automobile Manufacturers (SIAM)]
32
Domestic Market Share for 2010-11
Passenger Vehicles 16.25
Commercial Vehicles 4.36
Three Wheelers 3.39
Two Wheelers 76.00
[Source: Society of Indian Automobile Manufacturers (SIAM)]
33
Automobile Exports Trends (Number
of
Vehicles)
Category 2004-
05
2005-
06
2006-07 2007-08 2008-09 2009-10 2010-11
Passenge
r Vehicles
166,40
2
175,57
2
198,452 218,401 335,729 446,145 453,479
Commerci
al
Vehicles
29,940 40,600 49,537 58,994 42,625 45,009 76,297
Three
Wheelers
66,795 76,881 143,896 141,225 148,066 173,214 269,967
Two
Wheelers
366,40
7
513,16
9
619,644 819,713 1,004,17
4
1,140,05
8
1,539,590
Grand
Total
629,54
4
806,22
2
1,011,52
9
1,238,33
3
1,530,59
4
1,804,42
6
2,339,333
[Source: Society of Indian Automobile Manufacturers (SIAM)]
34
Highlights of Kenyan Import - Export Policy
Aspects Impacting on Kenya’s Overseas Plan:
Kenya‘s overseas plan offers seeing that self-reliance already been well guided as
well as curved through its very own nationwide attention. This particular self-interest
might be assembled in to 3 primary groups:
Security/Political:
Peacefulness as well as balance is really a pre-requisite in order to interpersonal as
well as financial advancement. The actual government‘s promise to ensure the
safety of individuals, and also the safety associated with nationwide honesty as well
as sovereignty inside safe edges underlies the need to enhance nationwide passions
through ensuring the safe politics atmosphere with regard to advancement.
Economic Advancement or Development:
Economic development has been played a dominant role in shaping Kenya‘s foreign
policy. Its need to pursue an open economic policy and the demand for foreign
capital and investment flows, inter-alia FDI and ODA, has been influenced Kenya‘s
approach to foreign policy.
Geo-Political Factors:
Kenya‘s overseas plan in the area continues to be formed through aspects like the
existence associated with overlapping cultural local community throughout edges
and also the undeniable fact that Kenya is really a c?te condition from the Indian
native Sea as well as that affects relationships along with landlocked neighbours.
Kenya and Regional Integration:
Worldwide as well as Local Co-operation is really a main element of the other plan
from the any kind of nation. The participates positively in a number of local
35
endeavours. This is a person in Eastern Africa Local community, Typical
Marketplace with regard to Far eastern as well as +Development (IGAD), Indian
native Sea Edge Organization with regard to Local Co-operation, and the like.
COMESA:
Kenya continues to be connected an excellent importance towards the Typical
Marketplace with regard to Far eastern as well as The southern part of The african
continent, since it offers a excellent marketplace because of its produced item. The
actual COMESA area is really a lively financial region as well as a regular
membership towards the Totally free Industry Region (FTA) released within Oct
2150.
East African Community:
The actual rebirth associated with Eastern Africa Local community having a excellent
possible marketplace associated with 83 mil individuals who will certainly lead in the
direction of creating a competing marketplace as well as favorable atmosphere for
your circulation associated with investment decision towards the area.
Inter-Governmental Authority on Development (IGAD):
Kenya is really a person in IGAD, composed of from the 7 nations from the horn
associated with The african continent. The actual Horn associated with The african
continent is suffering from the actual perennial issue associated with drought as well
as IGAD continues to be determined powers within dealing with the problem
associated with drought as well as advancement.
36
Highlights of Indian Import - Export Policy
· Higher Help regarding Industry and also Product or service Variation
· Technological Upgradation
· EPCG Plan Détente
· Support regarding Environmentally friendly providers goods coming from Northern
Eastern side
· Status Owners
· Stability/ continuity in the International Buy and sell Coverage
· Marine industry
· Gems as well as Diamond jewelry Industry
· Agriculture Industry
· Leather Industry
· Tea
· Pharmaceutical Industry
· Handloom Industry
· EOUs
· Thrust to be able to Value Added Producing
· DEPB
· Flexibility offered to be able to exporters
· Waiver regarding Offers Healing, In RBI Certain Compose down
· Simplification regarding Treatments
· Reduction regarding Business deal Fees
· Directorate regarding Buy and sell Cure Actions
· DEPB Plan upto January the year of 2010.
· To market benefit add-on inside our made exports and also toward this specific
ending, have got agreed at least 15%.
· 100% upload driven products for starters further 12 months right up until 31st Drive
in 2011.
· The Authorities tries to market Company The indian subcontinent by means of half
a dozen or maybe more ‗Made inside India‘ exhibits to get structured across the
globe yearly.
· Foreign Buy and sell Coverage is always to aid exporters regarding scientific way
up marche upload industry structure, ‗Towns regarding Upload Excellence‘ and also
37
products positioned therein could be provided further targeted help and also offers.
· To inspire generation and also upload regarding ‗green products‘ by means of
actions like omitted producing plan regarding environmentally friendly cars, no
obligation EPCG plan and also offers regarding exports.
· E-Trade job could be integrated in a time sure fashion to deliver just about all pole
owners over a frequent program. Further ports/locations could be empowered
around the Digital Info Interchange within the next few years.
· Incentive obtainable beneath Emphasis Industry Plan (FMS) have been brought up
coming from 2 . not 5% to be able to 3%.
· Incentive obtainable beneath Emphasis Product or service Scheme(FPS) have
been brought up coming from 1 ) 25% to be able to 2%.
· 26 fresh market segments are already included beneath Emphasis Industry Plan.
Included in this are of sixteen fresh market segments inside Asian The usa and also
15 inside Asia-Oceania.
· 153 ITC(HS) Unique codes from several digit stage Product or service labeled
regarding Industry Associated Emphasis Product or service Plan (MLFPS)
· Focus Product or service Plan profit expanded regarding upload regarding ‗green
products‘; and then for exports regarding several goods from the particular Northern
Eastern side.
· To increase exports and also inspire scientific way up marche, further Obligation
Credit rating Scrips will probably be directed at Reputation Owners @ 1% in the FOB
value of earlier exports.
· Income Duty different to be able to fully EOU s and STPI products beneath
Segment 10B and also 10A regarding Taxation Behave, have been expanded for
that economic 12 months 2010-11 inside the Price range 2009-10.
38
Trade Berries of import and export
International trade barriers are slowly narrowing down and a new era of world trade
is emerging global economy export and import trade will play a major role since
interdependence between economics on several aspects is increasing. But
interdependence on trade and development aid between countries is viewed with
caution by most developing countries as they believe that developed countries are
always motivated to sustain their interests and under such situation interests of
developing countries may get partly neglected. India being a developed country has
to protect its national interests of development and therefore export import trade
policy has to be designed and implemented accordingly. In the export and import
policy approach of government towards various types of exports and imports is
conveyed to different exporters and importers. Export import policy regulates exports
and imports of a country. Buying goods and services from other countries is known
as import while selling services and goods countries is known as export. Nowadays
in the globalization era, no frugality in the world can retain shortcut from the
remaining globe. In the economic development of all developing and developed
economies import and export plays an important role.
India‘s foreign trade policy has been followed by controls and regulations on import
and export to protect domestic industry and trade. To protect domestic industry and
trade from foreign goods high import duty has been levied on imported goods and
again imports were regulated and controlled through license and import substitution
production measures (Capela, 2008). Despite all the controls and regulations and
import substitution measures India‘s foreign trade deficit has been increasing and it
reached at alarming heights during late 1980s when India resorted to large scale
borrowing from international financial institutions to settle trade deficit crisis.
39
Potential Market for Automobiles in the Gujarat
Atul Auto Ltd., General Motors, Munjal Auto India Ltd., Asia Motor Works,
Electro herm and Ajanta are the important players in the Gujarat.
General Motors plant in Halol, Panchamahals is the major player having
production capacity of 75,000 cars p.a.
Rajkot district in the Saurashtra region has the largest group for production of
Auto components and diesel engines.
Maruti Udyog Ltd. plans to export 2.5 lakh small cars to Europe from the
MundraPort in Kutch.
Business Opportunities in Gujarat
Gujarat, Growth level with the Business Resource, offers the great opportunity for
the good Investments as it is one of the most prefer location for Industrial
Investments in the Country. It is the house for the lively industrialist and the Business
Entrepreneurs.
Several factor influence Investment opportunity in the Gujarat depends on the
Investment Environment:
Availability of Natural Resources
Manpower
Policy Measurements and Incentive
Economy Attractions
Stable Leadership and Growth Policies
Enhancing Investments
Partnering Strengths
40
Conclusions
After compiling information and various data from the multiple sources we have
come to the following conclusions.
India is a favored destination for Automobile manufacturing.
Major corporations have either set shop or and in the process of setting their
manufacturing unit in India.
The most prefer destinations due to their proximity to the market, availability
of raw materials, availability of skilled labour, availability of natural resources
and favorable political and bureaucratic environment are
1) Guajarat
2) Maharastra
3) U.P
4) Karanataka
Gujarat has become an Automobile industry in the shortest time possible due
to the aggressive and big environment provided by the government to the
interested organizations.
o Prime Ex. Tata Neno Project and Maruti Suzuki
Skilled manpower easily available considering the number of engineering and
polytechnic institutes in Gujarat is around 145.
Comparative cost of hiring is lower with respect to Maharastra and Karnataka.
Rajkot and Mahesana are well known Automobile components hub.
Lots of organized units manufacturing components for global companies like
GM, Mercedes, BMW, Honda etc.
There for KVM will find Gujarat to be the best suitable partner to establish
manufacturing unit.
Sand and Dholera could be the best places because of its proximity to the
ports like mundra and kundla.
41
SUMMRY OF REPORT OF REA VIPINGO Ltd(KENYA)
INTRODUCTION OF THE KENYA AGRICULTURE SECTOR AND ITS
ROLE IN KENYA ECONOMY
Agriculture is the main engine of economic growth of Kenya. Agriculture Sector
greatly impact on GDP directly by 26% and indirectly by 27% through connection
with other sectors 80% of rural employment, 60% of export earnings and 45% of
annual government revenue are gained by agriculture. Reconciliation the agricultural
sector into commercially oriented and competitive sector capable of gaining private
investment and international markets is in the process by the government. The
revitalization will also target industrial crops such as cotton, sisal, pyrethrum etc. The
agricultural sectorial has expanded remarkably to a high records, a real increasable
growth of 6.3 per cent in the year 2010 as compared to contractions of 4.1 and 2.6
per cent experienced in 2008 and 2009 respectively.
The sector expanded impressively that in 2008 and 2009 real growth was 4.1
and 2.6 percent respectively while in 2010 it was 6.3 percent.
The basically diversification due to: good atmosphere in year 2010
Interrelation through supply of subsidized seeds and fertilizers by government;
Improvement in quoting price in tea and coffee changes the production of
Maize, wheat, rice, tea, sisal and pyrethrum were among the agricultural
commodities.
Rising global demand resulted in improved prices of tea, coffee, sisal,
pyrethrum and tobacco among other crops Rising global demand resulted in
improved prices of tea, coffee, sisal, pyrethrum and tobacco among other
crops
The favorable weather leading increasing in production of milk deliveries by
26.9 per cent from 406.5 million liters in 2009 to 515.7 million liters in 2010.
42
As more companies started a business of export the horticulture has fall
down. Industry like the sugar has faced significant challenges and government is
making effort to improve the sector. The governments implement their stated policies
for this industry that has growth opportunity in coming few years. There are also
other sectors where the country has important untapped resources include cotton,
forestry, fishing, pyrethrum, and macadamia nuts.
In Kenya agro-processing and packaging technologies are relatively
undeveloped. In particular, investment in packaging technology is critical during sea
freight, whose cost is significantly lower compared to that of air freight. To increase
the produce shelf life, reduce post-harvest losses, and improve consumer
acceptance both in the domestic and international markets deliberate efforts should
be made towards investing in this area.
Kenyan agriculture's main subsector is horticulture, the mainstay of the
country's economy, in achieving food security, income and employment generation,
foreign exchange earnings, raw material for agro-processing, and poverty alleviation.
The subsector directly and indirectly employs over six million Kenyans. After tea, the
horticulture industry is also the leading foreign exchange earner. In 2009, Kenya
earned KES 153 billion from the domestic market and
Major Agriculture based companies in Kenya:
Eaagads Ltd
Kapchorua Tea Co. Ltd
Kakuzi
Limuru Tea Co. Ltd
Rea Vipingo Plantations Ltd
Sasini Ltd
Williamson Tea Kenya Ltd
43
44
Business, Structure and Function of REA Vipingo Ltd
With proper handling, The REA Vipingo group of companies are well based
capitalization. A largest sisal fiber producer in Africa with sisal fibre production of
over 16,000 tones per annum. All fibre produced is exported except spinning. Most
of employees are housed on the estates which have good allowances and facilities
like medical facilities etc. and group employs over 3,000 people.The REA group
exclusive ‗REA Vipingo Plantations LTD‘ was started in 1995. Today, however it has
expanded which it includes the company like which have Vipingo estate & 4 wholly
owned subsidiaries; Dwa Estate LTD, which owns the Dwa estate, Amboni
Plantations Limited, which also owns the Spinning Mill in Tanzania, & Wigglesworth
Exporters Limited, which also has a warehousing and shipping operation based in
Mombasa
REA Vipingo ltd listed in 1996 on the Nairobi‘s Stock Exchange (NSE), the industry
has grown speedily from sisal‘s yearly fibre productions of 11,000 tones to more than
16,000 tones today. Turnover has improved from Kshs. 537millions in 1996 to Kshs.
1.10 billion today.
In current years there has been wonderful demand for East African sisal fibers
from outside of world that is the traditional cordages and bag markets. Main key uses
for quality REA Vipingo sisal fibers now contain extra high quality sisal carpets,
polishing applications on various cloth industries, sisal pulps is used in the producing
of specialty papers, cores for wire‘s ropes, dartboards & various handicrafts usages.
In addition to this a reasonably big market has been found in number of various
countries for producing products including plasters reinforcements.
REA Vipingo group pays significant attention to increase and improve the
quality control at all stage of sisal processing unit, processing and creating of its sisal
fiber with the product that fibre created from REA Vipingo estates is standardized
globally for its constant high quality.
The sisal plant, which is affiliate to the Agavaceae plant family and located to
the area of regions of north and central region of America, was first introduced to
East Africa in year of 1893. The plant that was brought to Tanganyika by Dr. Hindorf,
45
a German scientist, was the diversity Agava Sisalana which originates from the
Yucatan in Mexico.
The first sisal plants introduced in East Africa were planted at Kikogwe on the
area of south side of the Pangani River in Tanga region of Tanzania on the edge of
what is now the group's Mwera estate.
After a difficult begin, sisal production grow in East Africa and by the decade
of 1960s Tanzania's production alone was some about 230,000 tones annually with
a further increased in 60,000 tones being manufactured in Kenya. Most of the fibre
created in East Africa was, until the mid decade of 70s, used in the production of
lower value of agricultural baler twine.
With the arrival of synthetic fibre, and especially polypropylene, the
agricultural baler twine market diminished quickly and today virtually no African sisal
fibre produce the production of agricultural twine for the global market.
The total fibre production from Africa is currently estimated to be
approximately 59,000 tonnes per annum of which REA Vipingo's production of over
16,000 tonnes
Major Imports
Description Kenya's
import
from India
in 2008
Kenya's i
mport
from
world in
2008
India's
%
share in
Global
imports
Animal, vegetable fats and oils, cleavage products, 3.29 504.62 0.65
Cereals 12.71 375.17 3.39
Sugars and sugar confectionery 10.59 110.97 9.54
Cereal, flour, starch, milk preparations and products 1.26 35.71 3.53
Beverages, spirits and vinegar 0.05 35.38 0.15
46
Major Industries
Small-scale consumer goods (plastic, furniture, batteries, textiles), Oil refining,
Aluminum, Steel, Cement. The Industrial production Growth rate is 4.8%. brewing,
tobacco products, sugar, textiles, ship repair
Description Kenya's
imports from
India in
2008
Kenya's
imports from
world in 2008
India's % share
in global imports
Mineral fuels, oils, distillation products, 502.89 3074.91 16.35
Printed books, newspapers, pictures etc 6.78 1549.89 0.44
Nuclear reactors, boilers, machinery, etc 160.47 1104.78 14.52
Electrical, electronic equipment 108.39 958.14 11.31
Vehicles other than railway, tramway 36.26 892.03 4.06
Comparative Position of Kenya agriculture sector
Kenya’s agricultural sector continues to dominate Kenya‘s economy, although
only 15 % of Kenya‘s total land area has sufficient fertility and rainfall to be farmed
but only 7 or 8 % can be classified as first-class land. In 2006, 75 % of working
population in Kenya made their earnings from the land as compared with 80 % in
1980. After service sector agriculture is the second largest contributor to Kenya‘s
GDP. In 2005 agriculture, including forestry and fishing, contributed about 24 % in
GDP, as well as for 18 % of wage employment and 50 % of revenue from exports.
The fertile soil is best for the growth tea, coffee, sisal, pyrethrum, corn and
wheat in Kenya. Production is mainly on small African-owned farms formed from the
division of formerly European-owned estates. Livestock predominates in the semi-
arid savanna to the north and east.
India’s Agriculture sector is the strength of Indian Economy. About 65% of
Indian population depends directly on agriculture and it contributes around 22% in
47
GDP. Agriculture has its importance from the fact that it has vital supply and demand
links with the manufacturing sector.
Agriculture sector has contributed towards the production and productivity of
food grains, oilseeds, commercial crops, fruits, vegetables, food grains, poultry and
dairy during last five years. India is the second largest producer of fruits and
vegetables in the world in addition of being the largest overseas.
Indian Economy stats Kenyan Economy stats
Aid as % of GDP 0.3% 4.9%
Economic freedom 1.5 1.9
Exports to US $3,233,200,000.00 $56,600,000.00
GDP $4,164,000,000,000.00 $41,480,000,000.00
GDP growth > annual % 9.23 annual % 5.81 annual %
GDP (per capita) $3,751.99 per capita $1,180.31 per capita
GDP per capita in 1950 $597.00 $947.00
GDP per capita in 1973 $853.00 $1,055.00
GDP > PPP $3,362,960,000,000.00 $34,504,000,000.00
Gross National Income $477,000,000,000.00
44 times more than Kenya
$10,657,900,000.00
Gross National Income (per
$ GDP)
$14.37 per $100 $30.73 per $100
114% more than India
Income distribution >
Poorest 10%
3.5% 2.4%
Income distribution >
Richest 10%
33.5% 36.1%
(Source: nationmaster.com)
48
Present Position and Trend of Business (import / export) with India
In 1981 India-Kenya trade agreement was signed. In 1983 India-Kenya Joint
Trade Committee (JTC) was set up at Ministerial level. The JTC has met six stimes
since, the last in October 2010 in Nairobi. In 1985 A Joint Business Council was set
up by the Federation of Indian Chambers of Commerce & Industry and the Kenya
National Chamber of Commerce & Industry (KNCCI). In 1996 KNCCI signed a
Memorandum of Understanding with the Confederation of Indian Industry (CII).
In 2011 Business promotion events organized in Kenya include : ‗India:
Medical Tourism Destination 2011‘ organized by Services Exports Promotion Council
(SEPC) in Nairobi in March; Buyers Sellers Meet organized by the Engineering
Exports Promotion Council (EEPC) in Nairobi in April; participation by 11 Indian
companies at the Build Expo Kenya exhibition; participation of Plastics Export
Promotion Council (PLEXCONCIL) with 48 Indian exhibitors at the 4th International
Exhibition for Plastics, Rubber and Packaging Industry held in Nairobi in July;
participation of 24 Indian companies through FIEO at the 15th Kenya International
Trade Exhibition that was held in Nairobi in November. Tata Africa Holdings (Kenya)
and Mahindra & Mahindra were among the companies that participated at the Kenya
Motor Show that was held in Nairobi in September.
Trade
The mutual trade grew by 57% to reach US$ 2.4 billion in 2010-11. Nearly
US$ 2.3 billion constituted India‘s exports to Kenya. India is the sixth largest trading
partner of Kenya. According to Kenyan statistics, the two sided trade for January-
November 2011 is approximately US$ 1.5 billion. Main Kenyan exports to India
include soda ash, vegetables, tea, leather and metal scrap. Main Indian exports to
Kenya include pharmaceuticals, steel products, machinery, yarn, vehicles and power
transmission equipment
.
INVESTMENT
In 2005 Tata Chemicals Ltd. acquired Magadi Soda Company Limited.
Several leading Indian public sector insurance companies participate in Ken India
Assurance Co. Ltd. More recent investments in businesses in Kenya by Indian
49
corporate include Essar Energy (petroleum refining), Bharti Airtel (telecom), Reliance
Industries Ltd. (petroleum retail); Tata (Africa) (automobiles, IT, pharmaceuticals,
etc.).
Several Indian firms including KEC, Kalpataru Power Transmission Ltd.,
Kirloskar Brothers Ltd., Mahindra & Mahindra, Thermax, WIPRO, Jain Irrigation
System Ltd., Punj Lloyd, Emcure, Dr. Reddy, Cipla, Cadila, TVS and Mahindra
Satyam, etc., have a business presence in Kenya and also the Bank of India and the
Bank of Baroda. HDFC has a Representative Office. In 1981 An India-Kenya Double
Taxation Avoidance Agreement (DTAA) was signed. In November 2010 the 2nd
round of negotiations to review the DTAA was held in Nairobi.
India-Kenya to increase Bilateral Trade to $ 2.5 Billion by 2012-13
Kenya and India, the two countries have decided to increase the level of
cooperation in the spirit of South-South cooperation. In the meeting held on 14th
October, 2010 between, The Minister of Commerce and Industry, Mr. Anand
Sharma, Government of India, and Prime Minister of the Government of Kenya, Mr.
Raila Amolo Odingo, this was decided.
Namaskar Africa‘ is an private networking forum of Included of Indian and
African enterprises provide and offering investments, trading and joint venture
business opportunities across the agriculture sectors of shared interest to both the
sides, India‘s Duty Free Tariff Preference (DFTP) Scheme for Least Developed
countries (LDCs) and particular sectors of power, health and ICT.
‗India-East Africa Business Forum‘ have bring jointly for a business
conversation, 12 countries of east Africa and the policy makers, financial institutions
(FI), entrepreneur, procurement institutions, multilateral funding agencies,
investment bodies, sectorial nodal institutions (NI) and regional bodies coming from
India to contribute to their learning and experience for common growth and talk
about the project specific opportunities in known sectors for mutual collaboration.
50
Kenya's Top 10 products Imports from India
Description Imports from
India
in 2007
Imports
from
India in
2008
Growth
from
2008/2007
All products 844.55 1,315.47 55.76
Mineral fuels, oils, distillation
products, etc
277.55 502.89 81.19
Nuclear reactors, boilers,
machinery, etc
77.00 160.47 108.38
Pharmaceutical products 67.76 115.53 70.49
Electrical, electronic equipment 82.22 108.39 31.81
Iron and steel 49.94 70.54 41.23
Vehicles other than railway,
tramway
33.22 36.26 9.12
Plastics and articles thereof 27.37 33.31 21.66
Salt, sulphur, earth, stone, plaster,
lime and cement
9.03 20.19 123.41
Paper & paperboard, articles of
pulp, paper and board
12.01 20.17 67.90
Articles of iron or steel 14.6 19.444 33.18
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Kenya's Top 10 Products of Exports to India
Descrpition Kenya's
Exports
to India
2006
Kenya's
Exports
to India
2007
Kenya's
Exports
to India
2008
% Growth
2007/2006
% Growth
2008/2007
All products 52.22 86.73 98.87 66.08 14.01
Inorganic chemicals, precious
metal compound, isotopes
19.37 38.60 56.65 99.27 46.74
Salt, sulphur, earth, stone,
plaster, lime and cement
5.64 6.34 10.48 12.42 65.35
Coffee, tea, mate and spices 5.93 7.25 9.38 22.41 29.34
Raw hides and skins (other
than fur skins) and leather
5.58 6.03 5.71 8.01 -5.29
Edible fruit, nuts, peel of citrus
fruit, melons
1.57 0.86 3.72 -45.21 333.92
Lead and articles thereof 0.15 2.04 2.17 1,278.38 6.18
Wool, animal hair, horsehair
yarn and fabric thereof
1.73 2.33 1.88 34.93 -19.25
Vegetable textile fibers nets,
paper yarn, woven fabric
0.85 1.58 1.50 85.58 -5.12
Copper and articles thereof 1.45 0.74 1.14 -49.07 53.78
Pearls, precious stones,
metals, coins, etc
1.34 1.43 0.89 6.58 -37.45
(Source: focusafrica.gov.in)
52
POLICIES AND NORMS OF KENYA FOR IMPORT/EXPORT
The documents required for a typical export transaction: Commercial invoice are as
follows.
Bill of lading/Airway bill
Packing list
Certificate of origin
All necessary permits
As with imports, these documents need to be lodged together with the customs
declaration to clear the goods for export. You can engage a freight forwarder to do
the documentation on your behalf.
Value added tax:
VAT standard rate of charge is 16%. Zero rated supplies include taxable
services and export of raw materials & goods and the supply or import of specific
goods, especially for goods which used in agriculture, computer technology for
hardware and software, educational service and health , global air travel and gives to
licensed oil exploration companies.
Excluded supplies comprise of most agricultural produce in its unprocessed or
preserved state and financial services provide by banks. For supply of and power
electricity and fuel at a special rate of 12%.Prohibited and limited Exports is
described by Third agenda of the Eastern Africa customs Management Act. Waste
and scrap of ferrous cast iron, timber from any wood grown in Kenya and wood
charcoal integrated in restricted exports.
EXPORT SUBSIDIES A Manufacturing under Bond (MUB) program that is designed to encourage
manufacturing for export is maintained by Kenya. The program is open to both local
and foreign investors. MUB goods are expected to be exported. If not, they are
subject to a surcharge of 2.5 percent and are subject to all other duties. Enterprises
are exempted from VAT and duty on imported raw materials which are operating
under this program and other imported inputs and have a 100 percent investment
allowance on plant, machinery, equipment, and buildings.
53
Kenya‘s successful garment and apparel sector have become center of
Kenya‘s EPZ. Up to 20 % of their outputs on the domestic market are allowed by
EPZ firms to sell. However, they are liable for all taxes on products sold domestically
plus a 2.5 percent penalty. There is no general system of preferential financing,
although sectorial government development agencies in areas such as tourism and
tea are supposed to provide funds at below-market rates to promote investment and
exports.
Export Taxes and Charges
The EAC custom union protocol provides flexibility for member countries to
impose export taxes and charges on a selected range of products for the
development of sensitize sectors. Kenya maintains an export tax of 25%, on hides
and skins and scrap metal to encourage local processing.
Export prohibitions, restrictions, and licensing
Kenya restricted the Exportation of product like as the round wood, firearms
and ammunition of every type, and to other article having the exterior of lethal
weapons. A license is necessary for exports of most agricultural and food products,
54
food, minerals, and mineral products. Exports of certain agricultural products and
food products are subject to unique licenses to make sure that the country remains
self-dependents in these products.
Export of plant are focus to a phytosanitary documentation from Kenya Plant
Health Inspectorate Service (KEPHIS), while animal‘s export and export of animal
products for necessity for a health of people and sanitary certificate from the of
Veterinary Services Department.
Export Processing Zones Scheme
The Export Processing Zones Scheme which was recognized in 1990 allows
for duty and VAT exemptions on imported machinery (except motor vehicles) and
raw materials. Besides high value infrastructure, companies located in EPZs
promotes from a ten-year corporate tax, income, and maintenance tax holiday;
exclusion from stamp duties; and a 100% investment allowance (applicable over 20
years). The Export Processing Zones Authority (EPZA) main purpose is facilitating
licensing and rapid project approval and also acts as the primary licensing and
regulatory agency on behalf of the Government.
POLICIES AND NORMS OF INDIA FOR IMPORT/EXPORT
A very special Agricultural Production Scheme that known scheme called
"Vishesh Krishi Upaj Yojana‖ which was introduce to raise and increase flower‘s
export, green products like vegetables, fruits, small forest manufacture & their value
added products has been introduced. Under this scheme, product ‗s exports qualify
for duty free credit entitlement (5 per cent of Free On Board (F.O.B) total value of
export) for import inputs and other products;
Export Promotion Capital Goods (EPCG) scheme for import of goods it is duty
free import of capital goods under, allows the producing of capital goods and
services imported under EPCG for agriculture product anywhere in the Agriculture-
Export Zone (AEZ); Utilize finances from the 'Assistance to States for e Development
of infrastructure of Exports (ASIDE) scheme' for growing and development of AEZs;
55
Liberalization of import of goods, planting material, bulbs, tuber and
liberalization of the permission export of derivatives plant parts and extract to
promote export of medicinal plants & other herbal products.
Import Procedures:
Documentation: Importers must provide an import statement in the set Bill of
Entry format, revealing the value of the imported goods. This must be accompanied
by any import license and phytosanitary certificate (in the case of agricultural
commodities), along with documentation such as sales invoices and freight and
insurance certificates.
There is as such no requirement to interpret the import documents into the
regional language as English is an official language. All consignments are necessary
to be inspected previous to permission. In the current customs set-up, appointing a
clearing agent avoids delays. The authorization of imported food products at the port
of entry requires a certification from the port health authority that whether the product
is produced according to the standards and regulations of the PFA or not. However,
certification is based mostly on visual examination and proceedings of past imports,
as most ports have limited testing facilities. As a result, importers of new products
can sometimes countenance delays in clearing their goods. The custom clearance
period may vary from one day to one month, depending on the product and skill of
the importer. In case of a disagreement or refusal of the delivery, the importer can
case a plea at the Customs office at the port of entry.
Import Duty on Sisal fibre
17-Mar-2012
Customs Basic Duty: 12.5%
Basic Duty Pref:
Addl Duty: 8.16%
Spl Addl Duty: 4%
56
Trade barriers
There are major constraints to the greater success in export development of Kenya.
They include:
Undermine price competitiveness of exports due to poor infrastructure such
as airports, roads, high electricity tariffs, telecommunications, etc.
Harmful effects of liberalization on preset manufacturing firms in which most
firms are unable to meet up with cheap imports, particularly from South East
Asia;
Lack of adequate funding for research and promotion activities continue to
constrain many developing countries‘ efforts to increased and competitive
export trade;
In the area of trade many deprived countries lack capacity in negotiations as a
consequence they are unable to take the advantage from bilateral and
multilateral trade arrangements.
Market entrée remains challenging due to tariff and non-tariff barriers to deal
in many markets together in the developed and developing world.
Customs Clearance
Recent changes by the Kenya Revenue Authority for electronic customs
clearances have created some confusion and delays at Kenya‘s ports of
entry. Until the program is improved, revised, or eliminated in favor of port of
entry inspections, it will pose an added expense and administrative burden on
exporters to Kenya. Also, allegations of corruption and on-going delays in
cargo handling at the Port of Mombasa, the region‘s major trade hub, continue
to add unnecessary costs for exporters. In response to demands from Kenyan
exporters and the Kenya Association of Manufacturers (KAM), the
government vowed to begin 24-hour, round-the-clock customs services at the
port, but is still working out the operational and budget details.
57
POTENTIAL FOR IMPORT / EXPORT IN INDIA MARKET
The Export Promotion Capital Goods (EPCG) Scheme must be extended to
cover up agriculture sector as there are requirements to adopt the latest process &
product and technologies to raise productivity, industrious body Assocham said.
Other than being reliable on vagaries of monsoon, agriculture faces serious
problematic issues of food security and wastage in the supply chain. Nearly 70% of
the population is engaged and dependent on it.
The EPCG program of the Foreign Trade Policy gives permission of import of
capital goods at nil customs duty subject matters to an exports commitment to
equivalent to 6 times more than of duty saved to be rewarded in six years. This
scheme is valid till March 31.To promote and encourage Indian manufacturers
constantly upgrade their technology and provide products of global expected
standards, it is suggested that the scheme continues as a permanent element of the
Foreign Trade Policy, said Mr. Rawat in announcement to the Directorate General of
Foreign Trade (DGFT).
There is a need to increase productivity and ensure availability of essential
commodities at reasonable prices in domestic market, the chamber said."If the
benefit of zero duty EPCG is extended to stakeholders, it will help them to leverage
their strengths," Assocham Secretary General D S Rawat said.
The government had extended the zero-duty EPCG scheme by one year to
March 31, 2012. At present, the scheme covers sectors, including engineering and
electronics, textiles and handicrafts. Under it, a person can import capital goods at
zero customs duty subject matter to an exports obligation equivalent to 6 times of
duty saved to be fulfilled in six years.
58
Policies and initiatives taken by Indian government for agriculture business
opportunities
The main purposes of the schemes are:
Helping the States to increase public investment in allied sector product and
agriculture sectors products.
It help to provide flexibility and self-sufficiency to the States for planning and
implementing and executing agricultural, rural and allied sector schemes. It
confirms the preparation of plans for the villages, districts and the States
based on agro-climatic conditions, ease of use of technology and natural and
environmental resources.
Ensure that the local needs or crops or priorities for better reflected. The main
objective is to achieve the target of reducing the difference in yield gaps in
important crops, during focused intercommunication.
Gujarat - Leading as Second in ‗Green Revolution‘ has earned a rise in
agricultural growth table at 9.6 per cent and has impressed a niche in the field area
of Agricultural Development in India. In the 2009, Gujarat‘s agriculture growth rate
has increased by three times more than the national growth rate.
With the help of the ministry of agricultural and rural development department,
it is has taken a positive initiative to change and improve their lives of farmers with its
Agriculture regulation and Policies and the exclusive proposal of the ‗Krushi
Mahotsav‘ in the Gujarat State.
In the year 2001, the State was on the shortage of position of less water
resources but now today it shows as World‘s biggest water resource that is Narmada
Canal. Now it is a situation where in the dust particles took to wind storm, there are
green agricultural fields and where the farmers sowed in the agricultural land with 1-
2 crops, now they have sort for 3-4 crops. Continuous and tremendous efforts and
hard work of seven years and well executed planned efforts of the Government have
achieved in Green Revolution taking healthy shape in Gujarat.
The Gujarat Agro vision 2010 shows a healthy improvement in the quality of
life style of the rural people, which includes helping or giving aid to those who are
59
resource poor, by providing them better employment opportunities and increasing
their income.
The government helps to increase agriculture promotion activities through
focused agricultural research, and use and application of biotechnology, information
technology bioscience and. Conservation of soil, water and biodiversity and
agricultural science are the major concerns to be environmentally sustainable. As an
outcome, a separate Department for ‗Climate Change‘ is established as a major
challenge to humankind. .
Gujarat Agro Industries Corporation (GAIC), which enhances and promotes
agricultural and rural activities at the ground level and increase in the development of
agricultural industries in the state, is a tremendous e.g. Of the hype of forward
looking policies of the Gujarat state.
60
SUMMERY OF GCR REPORTS ON TEA INDUSTRY WITH REFRENCE TO
KENYA TEA PACKERS
Introduction to the KENYA TEA PACKERS
Ketepa means regarding Kenya Teas Packers, a small responsibility business}
authorized inside Kenya having its hq inside Kericho, Kenya. Since 1978, they've
been creating Kenya's most liked designs of teas and they also today upload goods
to be able to desired destination around the globe.
The particular Kenya Teas Packers Minimal (KETEPA) has been authorized as
being a Privately owned Business} inside Oct 1977 and also started out functions
inside The month of january 1978. The business has been necessary legally to be
able to function the area industry simply. Regulations has been improved inside
1992 which usually granted upload regarding teas. KETEPA today exports jam-
packed teas to be able to places around the globe. The top business office and also
Taking Manufacturing plant is situated in Kericho concerning 270 kilometers Western
regarding Nairobi.
Ketepa will be held from the teas Growers regarding Kenya from the Kenya Teas
Improvement Organization Minimal (KTDA) as well as the Kenya Teas Declaring no
to prop Relationship (KTGA). The particular Kenya Teas Improvement Organization
will be the bulk shareholder addressing above 435.00, 000 small scale teas growers
propagate nationwide. These kinds of growers very own above 62 Teas Digesting
Industries across the nation and also create above 60% of all Kenyan Teas.
Additional significant shareholders contain Brooke Connection Kenya Minimal
(Unilever Tea), David Finlay, Williamson Teas and also Asian Produce(EPK)
amongst others who also collectively very own 32 teas digesting industries and also
create concerning forty percent in the teas stated in Kenya.
Ketepa is actually a genuinely Kenyan-owned business}, stimulating Kenyans and
also boosting the typical regarding existing in the small scale teas declaring no to
prop regarding Kenya who will be almost all of00 the shareholders. The existing aim
is always to raise the profits to your Shareholders simply by shortening the particular
supply string by means of increased sales of high quality, hygienically jam-packed
value added teas from our and also upload market segments. Upload options mainly
in the produced planet just where rates regarding teas are generally not as
necessary as the standard are usually aspects of curiosity for people. We could
61
thinking about written agreement taking and also taking our personal legitimate top
quality natural Kenyan for that discriminating international buyers. Kenyan teas will
be produced minus the usage of insect poison and also Ketepa warranties you the
best integrates fused collectively coming from across Kenya.
1. 1 VISION STATEMENT
To be the leading tea blending, packing and marketing company in Africa and a
significant player In the Middle East.
1. 2 MISSION STATEMENTS
To be the consumers‘ first choice for blended tea of high quality and great tastes
1. 3 QUALITY POLICY STATEMET
Kenya Tea packer limited is committed to sourcing, blending, packing and marketing
of the highest quality teas.
1. 4 OBJECTIVES
Establish and maintain an effective quality management system
Measure all aspects of the quality management system as a basis for continued
improvement.
Improve the system through training and investment in new technology.
Comply with statutory and other requirements
Different types of Products of Kenya Tea Packers:
1) Fahari Ya Kenya
2) Safari Pure Tea
3) Fahari Ya Kenya Ginger
4) Ketepa Pride Tea Bags
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5) Flavoured Tea Bags
6) Karibu Chai
7) Safari Ice Tea
Kenya Tea Packers about the Tea:
Tea without milk has no calories.
The average cup of tea contains less than half the level of caffeine that coffee
has.
One cup contains only 50mg per 190ml cup
Tea is a natural source of fluoride and drinking four cups makes a significant
contribution to your daily intake improving oral health.
Tea has antioxidants that boost the immune system.
63
Website: www.ketepa.com
NOTE: ( All the above information about the Company has been taken from the
company’s website)
Comparative Position of Kenya’s Tea Industry with India and Gujarat
Introduction to India’s Teas Market:
Teas will be ancient to be able to The indian subcontinent and is also a
location the location where the region will take plenty of take great pride in. This is
certainly due to the fact of its pre-eminence as being a foreign currency money
earner as well as benefits for the nation's GNP. In all aspects regarding teas
generation, intake and also upload, The indian subcontinent provides appeared as a
market leader, due to the fact that is liable for 31% of world generation.
Below are a few data details of the particular Native Indian Teas Market:
The overall yield in the teas market is just about Rs. 15, 000 crores.
Since freedom teas generation is continuing to grow above 250%, although
terrain location recently produced simply by forty percent.
There is a substantial upsurge in upload also in the past few years. Overall
web foreign currency attained once a year is just about Rs. 1847 crores.
The particular time extensive teas market immediately uses above 1 ) a single
thousand staff and also produces revenue great 15 thousand folks roughly.
Ladies amount to 50 percent in the employees.
64
Competitive Position of Kenya’s Tea Industry with the world:
Powerful liquoring:
Kenya is really a recognized maker as well as céder associated with dark
green tea prepared utilizing the automatic reduce, rip as well as snuggle (CTC)
approach to mashing for proper use within luggage. All of the simply leaves, pals as
well as comes tend to be floor in order to the same dimensions, mainly dirt as well as
fannings, generating inferior however strong-liquoring tea.
Competing Place with worldwide:
Kenya‘s green tea creation went upward this season upon great down pours,
nevertheless greatest marketplace -- and may provide a high quality -- is actually
falling apart within the back side of brand new industry plans.
Where as in India:
The Indian subcontinent will be next greatest manufacturer regarding teas on
earth (2010). Regardless of huge home-based intake the Indian subcontinent
banded next greatest vendre regarding teas on earth. Just last year, the particular
yield regarding teas market is at above INR being unfaithful, 1000 crore.
Key brands in Indian Tea Market:
Indian tea market has hundreds of tea brands. Some of the popular ones are:
1. Tata Tea
2. Broke Bond
3. Duncans
4. Lipton
5. Wagh Bakri
6. Goodricke
65
Opportunities in Indian Tea market:
Urbanization and rising income are changing the way Indian consume tea.
Some of the opportunities in the segment are:
Flavoured tea market is promising, some of the popular flavours include,
ginger, cardamom, lemon, tulsi, etc
Green tea is one of the fastest growing tea category and present opportunities
for various brands
Tea bags are a growing category. Tea bags also command higher prices as
compared to other categories. Tea bags are also packaged in various flavours
such as ginger, lemon, etc.
Scope of Sales in Gujarat for Kenya Tea Packers:
Eventually till now we studied that the India has the very big market of TEA in
the all over world. Actually in India there are many big companies are there who has
the ability to take or increase the GDP by increasing the sales of the Tea. Now let‘s
see what are the benefits and the scope of Kenya Tea Packers in Gujarat, India.
Positive Points:
Kenya Tea Packers has the total 7 different types of Tea.
The price of the teas of company has the similar price tags with local
companies in Gujarat.
The need of the safari tea has showing interestingly high numbers in
Gujarat.
The marketing networks in Gujarat with a channel of Wholesalers to
Retailers are big in numbers.
The biggest company of tea in Gujarat is Wagh Bakri Tea, and they are
providing mainly 4 types of tea i.e., Organic Tea, Darjeeling Green Tea,
D'ling Organic Darjeeling Tea, Organic Assam Tea.
Where as the Kenya Tea Packers has the big range of the products
and which has the nice taste of the Tea.
66
So, comparatively the Teas demand is there in the Gujarat‘s Market as
well as in the other areas of the India.
Policies and Norms of Kenya for Kenya Tea Packers for export.
Kenya Foreign Policy
Orientation:
Kenya‘s foreign policy has, from the independence it has designed and guided
through the following basic universally recognized norms:
Respect to the sovereignty with territorial integrity of other states and national
securities prevention
Good neighbourliness and peaceful co-existence
Peaceful settlement of disputes
There should not be any Interference in the Internal affairs of the other states
of the country
Non-alignment and national self-interest
Adherence to the Charters of the UN and OAU/AU
67
Policies and Norms of India for Import
Introduction:
The various rules and guidelines in respect of various commodities and
category of importers are mentioned in the following publications issued by the
Ministry of Commerce, Government of India and revised from time to time:
In the Custom Duty and rules of the India:
Tea is coming under code 0902, Customs Duty of Tea, whether or not flavoured.
090210 - Green tea (not fermented) in immediate packing‘s of a content not
exceeding 3 kg:
Hs – Code Item
Description
Basic Duty CVD SPL. CVD
09021010 Contents not
exceeding 25
grms
100.00% 0% 4%
09021020 Contents
exceeding 25
gms but not
exceeding 1
Kg
100.00% 0% 4%
09021030 Contents
exceeding 1
Kg but not
exceeding 3
Kg
100.00% 0% 4%
09021090 Other 100.00% 0% 4%
68
Now on the above given details of the import duty on Tea has the duty rates
according to their codes, these duties are same in the different products such as...
09022020 - Green Tea in Bulk
09022030 - Green Tea Agglomerated in the forms such as ball, brick and
Tablets
09022040 – Green Tea waste
09024020 – Black Tea, Leaf in bulk
09024030 – Black Tea, Dust in bulk
09024040 – Tea Bags
09024090 – Others
The term "HS Code" refers to the "Harmonized Commodity Description and
Coding System". The HS code is used by Customs agencies worldwide to assess
duties, collect trade statistics, and generally to control imports and exports.
(Note: All the above Policies and Norms of INDIA for IMPORT has been taken
from the legal governmental sources.)
Present Trade barriers for import of Tea in India:
The continued turmoil in between The indian subcontinent and several
produced nations around the world in World Buy and sell Business (WTO), relating
to removal of significance constraints provides induced lots of stress and anxiety in
the minds of Native indian community.
Buy and sell Boundaries are usually authorities evoked constraints in global
buy and sell. The particular boundaries will take several varieties, like the
Significance permits. Many buy and sell boundaries work with the identical rule the
particular timbre regarding some type of expense in buy and sell that will boosts the
price tag on the particular bought and sold goods. When 2 or more international
locations consistently make use of buy and sell boundaries in opposition to the other
person, a buy and sell warfare final results.
69
Potential for import in India / Gujarat Market
4.1 Development Possible:
The majority of India‘s populace nevertheless comes from communities and
therefore, it really is a specific area which cannot be ignored. Being an farming
economic climate, that is getting lots of concentrate, countryside earnings is likely to
improve. Which will certainly give a much better development potential customer for
your FMCG businesses as well as organization} such as Kenya Green tea Packers.
4.2 Development Possible within Gujarat:
There exists a massive with regard to the actual Green tea within the Gujarat.
Therefore there are lots of nearby and massive businesses are generally there on
the market, however the need from the green tea keeps growing such as anything at
all within the condition associated with Gujarat.
70
Business Opportunities in future
GLOBAL TEA INDUSTRY:
The follow table shows the amount of tea production (in tonnes) by leading countries
in recent years. Data is generated by the Food and Agriculture Organization (FAO)
of the United Nations as of January 2010.
Country 2006 2007 2008
China 1,047,345 1,183,002 1,257,384
India 928,000 949,220 805,180
Kenya 310,580 369,600 345,800
Sri Lanka 310,800 305,220 318,470
Bangladesh 58,000 58,500 59,000
From the above table it shows that the Kenya also has the maximum capacity of
producing the tea and it ranks 3rd in the world. Because Kenya has that kind of Land
and the Manpower which requires for the tea industry, and the different verities of tea
also available in Kenya.
SWOT Analysis of Kenya Tea Packers in India / Gujarat:
Strength:
Demand for tea has been growing rapidly in Gujarat as well as in other states.
Good Research Support by tea growers has will help industry grow further.
Different kinds of product of Tea and the different tastes of it.
Declining Export of India over the years.
Supply from more efficient players like Kenya.
71
Low Cost.
High Quality
Weakness:
Existing Competition in the local market.
Production efficiency
Opportunities:
Import of Tea from other Countries
Cost escalation on account of increase in the cost of production
To come up with new flavours/formulations of the tea.
To make tea more acceptable and fashionable like coffee.
Threats:
Local competition
Possibility of non acceptance of product
Customer preferences
Conclusion:
From the above discussed all the points and information we can surely say
that the company Kenya Tea Packers has the chance and can make the change in
the customers mindset about the tea. The main benefit for them is that the different
kind of products of tea with a different taste, and could make the most of it.
India is also a market leader in the world about the tea industry, where as
Kenya also ranks 3rd in the production of the tea in the world. The weak points of the
Indian tea industry can be the positive points for the Kenya tea industry, and
ultimately it will help the Kenya tea packers for their products to enter into the
Gujarat state and also in the other states of India.
72
SUMMARY OF GLOBAL/COUNTRY STUDY AND REPORT ON
“OPPORTUNITIES IN AGRICULTURE & CULTIVATION INDUSTRY
WITH SPECIAL REFERANCE TO KAZUKI LTD. KENYA”
Kakuzi is the major maker of Avocado in East Africa plus exports about 45
percentage of the sum quantity as of Kenya. Kakuzi is too listening cautiously on top
of the growth of grower plus Smallholder Avocado growers. 861 enduring employees
among a hit the highest point of an extra 720 set word agreement employees needy
on top of the seasonality of actions.
Kakuzi have 2 tea estate; Kaboswa and Siret, together located in Nandi Hills, Kenya.
Kaboswa is situated 330 Kilometer north west of Nairobi as Siret is located
concerning 350 Kilometer north west of Nairobi, on top of the equator, west of the
Great Rift Valley. The fair climate, linking 1000 to 2000 meters over sea height,
ensure so as to tea be able to be chosen all year surrounding. Nandi enjoy 2 wet
seasons; the little rain throughout October and November as well as the extended
rains, commencement on the ending of March from side to side to near the
beginning June. These rain stay the humidity in the land for a great deal of the year
along among the teas formed be of outstanding excellence, brilliant along with
blonde with terrific flavor.
Kakuzi farm 408 Hectares of avocado produce plus exporting together Fuerte and
Hass cultivars. The Hass season run as of June to mid-September by means of
Fuerte preliminary a small previous in March/April.
Kakuzi produce the Hass diversity of avocado which is in far above the ground insist
in European Union (EU) markets. This cultivar is term a "dark skinned" avocado
because it turn shady purple at what time prepared to consume. The bulk of our
Hass exports 70 percentage be exported to France, as 15 percentages go to the UK
through the stability spread from side to side other EU countries, Switzerland and
Scandinavia. The moderate climate is completely matched to far above the ground
excellence avocado manufacture in addition to our Hass manufactured goods is
recognized for its good quality taste and consumption worth.
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The extra avocado cultivar in Kenya is Fuerte which is full-grown by Smallholders.
This cultivar is term a "green skin" as the skin leftovers green as it become mature
and prepared for consumption. Kakuzi buy and exports Fuerte as of Smallholders
purchase 1,245 tonnes in 2011. We labor intimately through Smallholders to get
better excellence and dependability of supply.
Kakuzi have a combined scheme with Del Monte Kenya Ltd cover 1001 Hectares.
as well, Kakuzi grow 64 Hectares of new pineapple which is sell in restricted
markets.
The company has 4,407 top of livestock for complain manufacture which is sell keen
on Nairobi markets. The diagram is to uphold a group dimension of linking 4300 to
5000, needy on the accessibility of deal store and stock up livestock of linking 1,200
to 1,300 reproduction cows determination is maintain.
The Importance of Sustainability
since through all Camellia Plc. businesses, Kakuzi's operation be closely included by
means of the limited community in addition to, since the extremely natural world of
agriculture is lasting, we are conscious so as to we be able to contain an crash on
the surroundings. We be so devoted to organization our businesses in a sustainable
way. Our center standards are individuals of Camellia Plc, nurture in excess of a lot
of years, in addition to these determination carry on to direct our performance to
make sure a sustainable prospect for our businesses.
Health Care Provision
2 dispensaries tend to be set up upon our own properties providing healthcare
solutions as well as treatment in order to workers, their own household as well
as some other individuals through encircling places. These types of tend to be
manned through competent healthcare staff as well as solutions tend to be
totally free in order to workers as well as their own household.
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Communities
Almost all associated with our own companies possess the actual possible in order
to effect the actual interests within that all of us run. All of us will certainly carry on in
order to create the good factor in order to these types of interests where ever
feasible within the actual enthusiastic perception which the actual wellbeing
associated with the actual local community offers the good effect upon our own
procedures.
Environment
All of us will certainly carry on in order determining the actual environment effects
associated with almost all our own actions as well as handle these types of within the
accountable way in order to reduce the actual effect associated with our own actions.
Within assisting environment durability as well as biodiversity our own overview
program associated with exercise is actually in order to;
Comply along with almost all environment laws
Assess the actual primary environment effects associated with our own
company actions
Establish programs as well as functional handles in order to reduce
environment effects recognized within every associated with our own
companies
Provide suitable coaching in order to our own workers
The average industry performance has not been too bad in India. Today, changes
have been changing from time to time, even chemist are also keeping Agro products.
In the rural market, small retailers or store keeper keeping more products items from
each category products.
Kakuzi Ltd is going with good brand loyalty in the Agro products in Kenya by
providing good quality products with reasonable price. Because these are important
factors for the consumer to take buying decision. Kakuzi having medium product
portfolio in which some products are playing major role to build the image of Kakuzi
Ltd.
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Looking into the future of Agriculture Cultivation & Manufacturing Business, many
competitors is trying to increase their market criteria to compete with Kakuzi Ltd in
Kenya. Competitors are spreading their network with different sales offer, gifts and
incentives to their network. But Kakuzi Ltd is still providing qualitative products &
Services to the people of Kenya & others countries.
Kakuzi Ltd also contributing their efforts at the time of natural disaster and manmade
disaster. They are also keeping good relationship among the players of the industry
and keeping watch on upcoming trends of the industry.
Problem of the Industry
India is already a major producer of Agro Products (first in cereals, livestock
population, milk and second in fruits and vegetables), producing over 600 million
tons of food products, and in case the immense untapped potential of growth is
achieved the country can emerge as the largest producer of major food items.
Processing level presently being extremely low, the wastage levels are very high
resulting in colossal wastage of national wealth running in thousands of crores.
The small scale and unorganized sectors today account for 75% of the total industry
having only local presence without much access to knowledge, technology and
marketing network.
The unattractive nature and the high risk profile of food processing industry has
impeded required flow of credit from financial institutions who are yet to acquire the
proper understanding of this sector to attain the requisite levels of appraising skills.
Indian brands are yet to establish in the international markets calling for a concerted
effort to capture world market share in tune with our standing in the production front.
Future Aspects
India is among the world‘s major producer of Agro products, producing over 600
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million tons of Agro products every year. India ranks first in the world in production of
cereals, livestock population and milk. It is the second largest fruit and vegetable
producer and is among the top five producers of Rice, Wheat, Groundnuts, Tea,
Coffee, Tobacco, Spices, Sugar, and Oilseeds.
The key factors that are expected to trigger future growth for the Agri Business
include reduction in excise duties, relaxation of licensing restriction. The growing
reach of advertising medias like satellite and cable TV too is expected to give a
boost to the market penetration initiatives of the industry players.
PRESENT POSITION AND TREND OF AGRICULTURE CULTIVATION
BUSINESS IN INDIA
Farming and Production item provides industry possibilities with regard to manqué
berry farmers within the actual building as well as created nations. This particular
marketplace associated with farming grown items is actually anticipated in order to
develop internationally within the actual arriving many years as well as higher
development prices more than the actual moderate phrase (from 10-15 in order to
25-30 %) tend to be anticipated.
Natural producing may assist in order to decrease creation expenses (especially
wherever work is actually inexpensive in comparison in order to enter costs) the in
order to improve or even strengthen produces upon minor soil. This particular is
actually particularly appropriate with regard to smallholders within minor places
wherever Eco-friendly Trend farming offers business lead in order to the destruction
associated with ground male fertility as well as in order to higher financial
obligations simply because associated with improve within enter expenses.
Indian Agriculture Cultivated Products:-
Through Feb year 2011, about 1426 facilities within Indian possess already been
licensed because natural facilities along with a good region associated with about
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two, 775 hectares (Source: information modified through the actual statement ―The
Actual Eco-friendly Revolution‖ as well as FAO statistics).
Main regular natural items, that tend to be released through Indian, tend to be
introduced within Graph one. In comparison in order to some other items, natural
green tea as well as spices or herbs tend to be the actual the majority of typical
natural items becoming released.
The actual household marketplace with regard to natural items is actually because
however not really because created because the actual foreign trade marketplace.
The actual items accessible within the actual household marketplace within natural
high quality tend to be grain, whole wheat, green tea, espresso, pulses, fresh fruits
as well as veggies. Bulk suppliers or investors as well as food markets perform main
functions within the actual submission associated with natural items.
Export market
Indian native farming grown suppliers as well as exporters tend to be nicely
conscious associated with the actual need with regard to natural items within created
nations. Items accessible with regard to the actual foreign trade marketplace tend to
be grain, whole wheat, green tea, spices or herbs, espresso, pulses, fresh fruits and
veggies, cashew nut products, 100 % cotton, essential oil seed products as well as
therapeutic natural herbs. The actual stations followed with regard to the actual
foreign trade associated with natural items, other than with regard to green tea, tend
to be primarily via foreign trade businesses. Natural green tea is actually created
through main nicely arranged green tea properties that tend to be transferring green
tea straight. Within the actual situation associated with some other natural items,
mainly little farmers tend to be included within generating natural items.
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AGRICULTURAL CULTIVATION & MANUFACTURE INDUSTRY SHARE IN GDP:
INDIA
Throughout 2008-09 the actual farming field led in order to around fifteen. seven for
each penny associated with India's GROSS DOMESTIC PRODUCT (at 2004-05
prices) as well as ten. twenty three for each penny (provisional) associated with
complete export products apart from offering work in order to about fifty eight. two for
each penny associated with the actual function pressure.
Throughout 2009-10, farming field led in order to around fourteen. six for each penny
associated with India's GROSS DOMESTIC PRODUCT (at 2004-05 prices). The
actual discuss associated with Farming as well as of that type Areas within GROSS
DOMESTIC PRODUCT is actually approximated in order to become fourteen. two
percent within 2010-11. This particular is actually apparent through the actual
subsequent graph:
The actual discuss associated with Farming as well as Of that areas that consist of
Forestry as well as Angling. The actual discuss associated with Just Farming is
actually offers already been thirteen. nine within this year, thirteen. two within 2008-
09 as well as twelve. three within 2009-10.
AGRICULTURE DURING THE 11TH PLAN PERIOD
Throughout the actual very first 3 many years associated with the actual present 5 Yr
Strategy, the actual farming field (including of that type activities) documented a
good typical development associated with two. Goal for each penny towards the
actual Strategy focus on associated with four for each penny for each year. Within
the actual very first yr, 2007-08, associated with the actual present Strategy the
actual farming field experienced accomplished a good amazing development
associated with five. eight for each penny. Nevertheless, this particular higher
development might not really become managed within the actual subsequent 2 many
years as well as agriculture-sector development dropped in to the actual unfavorable
area associated with -- zero. one for each penny within 2008-09, even though this
particular had been the yr associated with the document 234. forty seven mil loads
meals creation.
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Expectation
The particular Economical Customer survey will be upbeat inside the particular
existing 12 months due to the fact together with any comparatively very good
monsoon, the particular agriculture-sector will be predicted to be able to increase
from a few. Several for every dollar since for every the particular 2010-11 progress
quotes. The particular culture industry progress inside the particular 1st several yrs
regarding the particular Program will be predicted from a couple of. 87 for every
dollar. Inside buy to be able to attain the particular Program concentrate on
regarding regular several for every dollar for every 12 months, the particular culture
industry requires to be able to increase from 7.
Decreasing Share of Agriculture in GDP of India
Throughout 2008-09 the actual farming field led in order to around fifteen. seven
for each penny associated with India's GROSS DOMESTIC PRODUCT (at 2004-
05 prices) as well as ten. twenty three for each penny (provisional) associated
with complete export products apart from offering work in order to about fifty
eight. two for each penny associated with the actual function pressure.
Within conditions associated with structure, away associated with the complete
discuss associated with fourteen. six for each penny associated with the actual
GROSS DOMESTIC PRODUCT within 2009-10 with regard to farming as well as of
that ilk areas, farming by yourself paid for with regard to twelve. three for each penny
implemented through forestry as well as signing in one. five for each penny as well
as the fishing industry in zero. eight for each penny.
The particular decrease inside progress regarding farm GDP has been mostly thanks
to be able to the particular slide inside the particular generation regarding farm plants
these kinds of since oilseeds, natural cotton, jute and also Mesta, and also
sugarcane. Inside 2009-10, regardless of encountering the particular most detrimental
south-west monsoon given that 1972 and also succeeding considerable slide inside
kharif foods materials generation, the particular progress partially reclaimed to be
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able to 0. Several for every dollar mostly thank to be able to any very good rabi.
AGRICULTURAL CULTIVATION & MANUFACTURE INDUSTRY SHARE IN GDP:
KENYA
Kenya‘s human population provides recently been increasing swiftly and also as a
result the particular region confronts a great uphill activity regarding acquiring a great
enough foods source. This specific as a result telephone calls regarding raising the
particular farm generation potential to be able to fit the particular human population
progress. Inside add-on Kenya will be any buy tiles online to be able to the particular
U. S. International locations Millennium Improvement Targets (MDGs) which usually
are usually globally arranged goals regarding traffic monitoring developmental
development inside fellow member nations around the world. MDG target amount
one particular speaks regarding getting rid of intense lower income and also craving
for food simply by 2015.
the reason why the actual Federal government associated with Kenya (GOK) offers
positioned focus upon farming because a good motor associated with moving the
actual general advancement associated with the actual nation is actually simply
because the actual vast majority associated with the actual populace is actually
mostly countryside. In accordance in order to the actual Technique with regard to
Stimulating Farming, 2004-2014 regarding 79% associated with the actual populace
stay within the actual countryside places associated with the actual nation deriving
their own sustenance through farming.
Laws related in order to natural farming
India‘s Nationwide Natural Program had been created as well as applied through the
actual Federal government associated with Indian via the Ministry associated with
Business. The actual Ministry associated with Business set up the Nationwide
Guiding Panel with regard to Natural Creation (NSCOP), in whose people had been
attracted through the actual Ministry associated with Farming, Product Panels, Meals
Running Industrial sectors, Jungles as well as Atmosphere, Technology as well as
81
Technologies, Countryside Advancement as well as Business, as well as Industry as
well as Export products. Within Mar 2000, the actual Nationwide Guiding Panel set
straight down the actual Nationwide Program with regard to Natural Creation
(NPOP). The actual Indian native NPOP had been modeled right after the actual
IFOAM (International Federation associated with Natural Farming Movement)
Fundamental Requirements with regard to Natural Creation as well as Running (IBS)
Government policy for organic agriculture
The particular goals regarding the particular Countrywide Plan regarding Organic
and natural Generation contain:
supplying the particular implies to be able to examine qualification shows
regarding organic and natural culture and also goods since for every the
particular authorized conditions;
establishing insurance policies regarding the particular qualification and also
improvement regarding organic and natural goods;
creating the particular Countrywide Specifications regarding Organic and
natural Goods (NSOP);
making the particular Countrywide Qualification Coverage and also Plan
(NAPP);
accrediting qualification shows to be able to end up being managed simply by
Assessment and also Qualification Organizations;
Inspection and certification of organic products marketed
domestically
One of the Country's Routine for the purpose of 100 % natural Formulation (NPOP)
is constructed not to mention completed as a result of one of the Country's
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Prescribing Committee for the purpose of 100 % natural Programs (NSCOP),
because of one of the Governing from India‘s Ministry from The business sector.
Inspection and certification of organic export products
The Director General of Foreign Trade (DGFT) includes designed them essential of
which virtually no skilled all natural device often be released except in cases where
them can be skilled by way of your official certifications body system duly recognized
by way of a person with the exact federal accredited accreditation institutions.
Domestic market of organic products
Certainly, there are certainly rather minimal tips out there regarding the very capacity
and even being successful for the very national healthy markets on the land of India.
Fairly recently, a good phone number for national marketing strategies endeavors
own happen to be announced through certain being successful. A good semi-
government-operated co-operation labor has got initiated towards promote healthy
products and services on a good phone number for sites on the very serious towns
and cities. Quite a few brand-name agencies own turned to towards can include
healthy products and services on most of their facial lines. On distant sections,
diverse farmers‘ online communities and even NGOs own initiated reselling healthy
products and services.
Awareness of organic agriculture
Natural recognition programs (publications as well as some other created material)
tend to be carried out in order to produce recognition amongst the actual farmers
regarding the actual benefits associated with natural farming through each general
public organizations as well as NGOs. APEDA offers carried out recognition
programs with regard to natural creation within a few associated with the actual says
within cooperation along with the actual particular Condition Authorities. Because the
outcome associated with the actual recognition program within Gujarat, a good
natural grind with regard to creation associated with aflatoxin totally free natural
groundnuts offers already been arranged upward within the actual Junagadh Region.
The actual Tripper Federal government offers recognized the actual property as well
as a good NGO with regard to establishing upward the product natural grind with
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regard to ―Kasha‖ range grain within which condition with regard to that APEDA
offers currently carried out the actual Techno-Economic Feasibility Research. Within
see associated with the actual big range blueberry creation within Tripper without
having the actual utilize associated with chemical substance fertilizers or even insect
sprays, a good Agri Foreign trade Area with regard to creation, running as well as
foreign trade associated with natural blueberry items offers already been arranged
upward within the actual condition associated with Tripura.
PRESENT TRADE BARRRIERS FOR IMPORT/EXPORT OF
AGRICULTURAL CULTIVATED PRODUCTS
Tariff and non-tariff barriers
Through 1947 in order to 1991, India's importance as well as foreign trade plans
become this kind of in order to an enormous almost all products may be importance
just below permit through the Main government's Control associated with Imports
and Export products (CCI&E). 20 years ago, Indian started financial reforms in order
to wave on the spending budget shortage, stability associated with repayments
issues as well as strength unbalances in a number of business areas from the
economic climate. Within effective many years, Indian made the actual industry
routine a growing number of clear. Still India's charges continue to be higher through
worldwide requirements, and several quantitative limitations upon imports continue
to exist. These types of higher charges as well as importance limitations possess
limited.
Because Indian eliminated quantitative limitations (QR) on the last set associated
with 715 products, finishing the industry plan liberalization which were only available
in 1991. From these types of 715 products 342 tend to be fabric items, 147 tend to
be farming items such as alcohol based drinks as well as 226 is also produced items
such as cars.
Whilst Indian offers eliminated a few contract price obstacles, they have released
some other prevent for example realignment associated with charges as well as anti
- throwing responsibilities. Around three hundred products include the 'sensitive'
listing of imports that this Federal government screens. The 'war room' team
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continues to be designed to carefully keep track of the actual importance styles for
the products.
Tariff rates
Classification: The Indian customs classification on tariff items follows the
Harmonized Commodity Description and Coding System (Harmonized System or
HS). India has fully adopted HS through the Customs Tariff Amendment Act, 1985.
There has been some modification of HS as appropriate to the Indian environment
concerning excise taxes. It is pertinent to note that the excise authorities also use the
HS codes for classifying the goods for levying the excise duty (manufacturing taxes)
on the goods produced in India.
While reduced tariffs have assisted several U. S. export industries, further reductions
in basic tariff rates would benefit a wide range of U. S. exports. Industries that might
benefit from reduced tariff rates and removal of Quantitative Restrictions (QR's)
include the following: consumer products, processed food, footwear, toys and
telecommunications products. Fertilizers, mining equipment, wood products,
jewellery, camera components, paper and paperboard, ferrous waste and scrap,
computers, office machines and spares, textile machinery and spare parts, hand
tools, soft drinks, cling peaches, vegetable juice and canned soup would also
benefit.
Taxes
India's twenty-eight says might taxes products "imported" from all other say. Within
theory, the ability in order to taxes inter-states business pieces our economy,
particularly industry within farming products. The federal government offers wanted
in order to make simpler the actual taxes framework through presenting the nation-
wide Useful Taxes. Imprudence inner prices upon business possess lengthy created
India's taxes program finest, and get reported like a element messing up financial
development. The federal government experienced arranged Apr one, the year 2003
since the release day, however it continues to be delayed consistently simply
because not every associated with India's twenty-eight says created the required
formulations for your changeover. The actual show noticeable the 3rd successive yr
85
that this Federal government continues to be necessary to delay the actual prepared
release day due to a insufficient general opinion upon techniques using the condition
authorities.
WTO and Trade in Agriculture.
The entire world Industry Business been successful the forerunner GATT within 95.
There have been numerous contracts which were authorized underneath the
sympathy of the brand new business. The actual Contract upon Farming (AoA)
currently generally recognized had been one of the many other contracts which were
authorized. Another contract had been associated with Assets, Industry within
Products, Industry within Solutions, Industry Associated Intelligent House Legal
rights and so on
As stated above, the initial GATT do possess some contracts associated with
industry within farming, however it included numerous weaknesses. Like this
permitted nations to make use of a few non-tariff steps for example importance
quotas financial assistance and so on like a calculate to safeguard the actual
farming. For that reason the actual Farming industry grew to become extremely
altered and also the created nations utilized these types of weaknesses in order to
enormously safeguard their own farming.
The new rules and commitments apply to:
Household Assistance -- financial assistance along with other programs associated
with offering indirect and direct assistance towards the farming actions from the
nation, such as the ones that increase or even assure grind door costs as well as
farmers' earnings
Import and Export
Since Independence, India has made a lot of progress in agriculture in terms of
growth in output, yields and area under crops. It has gone through a Green
Revolution (food grains), a White Revolution (milk), a Yellow Revolution (oilseeds)
and a Blue Revolution (aquaculture). Today, India is one of the largest producers of
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milk, fruits, cashew nuts, coconuts and tea in the world. It is also well known for the
production of wheat, vegetables, sugar, fish, tobacco and rice.
On newly released a long time, the very large centralized Governing administration
has got given numerous economical credits just for increasing storage devices
comforts on distant sections. It all at the same time gives you budgetary assist
towards the very Say Authorities just for building and even scattering nutrition spore
for subsidized plans, primarily towards the entire family through annually money
down the page the very low income tier. At this time, the very better quantity for loan
provider credit standing as a result of emphasis providing credit, favorable
stipulations for swap and even liberalized national and even outward swap just for
garden futures own at the same time invited personalized online players towards buy
on sylviculture.
Agricultural Exports
Farming export products possess demonstrated a good improve through about Rs.
sixty billion dollars within 1990 -- 91 in order to Rs. 398 billion dollars within 2009-10.
The actual Government's unique initiatives in order to motivate foreign trade
associated with meals grain within current many years via offer associated with
Globe Industry Business or even WTO suitable financial assistance offers business
lead in order to Indian getting 1 associated with the actual top exporters associated
with meals grain within the actual worldwide marketplace
Agricultural Imports
The actual imports associated with farming items enhanced through Rs. twelve
billion dollars within 1990 -- 91 in order to Rs. two hundred and twenty billion dollars
within 2009- ten. The actual discuss associated with agri-imports to accomplish
products imports within 2009-10 had been four. fifty nine %. Harmless essential oil
may be the solitary biggest farming item brought in to the nation as well as makes up
about two-thirds from the complete farming imports.
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SWOT Analysis
STRENGTH ·
Provides work for any big Indian native populace, residing in countryside
areas.
Recent improvements within technologies as well as federal government
endeavors assistance the introduction of the actual field. Within pursuance
from the federal government plan to exercise as well as write this article
brought governance, the actual division associated with farming as well as co-
operation continues to be using numerous steps to advertise the utilization as
well as putting on technologies using the purpose of creating farming ―online‖
for your utilization of farmers, exporters, as well as investors, and so on
WEAKNESS
Inadequate street cordons additionally stay a significant restrict for your
improvement well-functioning farming marketplaces. A relentless portage
associated with land-holdings, bad repair off current irrigation techniques as
well as decreasing ground male fertility in certain places is also aspects.
Another some weakness is founded on seasonality and also the undeniable
fact that farming field outcome greatly depends upon the actual yearly
monsoon, because under a third associated with cropland is actually irrigated.
The primary food grain vegetation, like plus some money vegetation (oilseeds,
100 % cotton, jute as well as sugar) rely on the actual south-west monsoon
(This provides 79% associated with India's rainfall, generally inside a three-
month time period through 06 in order to mid-September. The actual 2002
south-west monsoon had been devastating, evoking the fall months feed pick
in order to drop through 18% every year. 7 years ago the actual field
stagnated compared to the earlier yr once the greatest monsoon down pours
within 10 years created regarding about 10% within the farming field. Too
much rainwater within 2006 triggered serious water damage within
Maharashtra.
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OPPORTUNITIES
Palmer-Jones as well as Sen (2003) claim that the federal government is
constantly on the have a determining within helping farmers via farming credit,
financial assistance, cost assistance plans as well as expansion solutions.
However are not any meals protection issues presently, much better farming
efficiency will certainly contain the step to steady development within meals
creation, provided the bounds from the reference foundation. It has an chance
for the actual financial development to profit much more individuals only when
the nation increases farming efficiency, enhances the approach to common
schooling to assist the actual large numbers who else should keep producing,
as well as stimulates time-consuming production industrial sectors.
THREATS
As earnings goes up, Indian has become a progressively more essential
marketplace with regard to fully processed foods, particularly in the towns as
well as amongst teenagers. Conscious of high quality as well as worldwide
brand names, people are more unlikely to aid nationwide items, and they are
weaker to pay for high quality costs with regard to overseas items of higher
high quality. This particular signifies any replacement towards the nearby
items, affecting manufacturing amounts of farming field.
Food assistance costs with regard to whole wheat as well as grain possess
provided farmers no profit in order to shift and also have packed federal
government storage space services in order to stocked full, whilst to get
selling price associated with food grains unnaturally higher. Present farming
plan, that facilitates cereal creation, is actually extremely costly and will also
be not able to cope with the actual probably situation of the change within
usage through cereal meals in the direction of non-cereal meals. Too little of
marketplace facilities additionally hinders the actual motion associated with
vegetation, resulting in unexpected shortages. Indian offers significant
possible being a céder associated with grain, 100 % cotton, and various kinds
of fresh fruit as well as blossoms; however it has up to now not really already
been drawn on (Yeoh as well as Siang, 2006).
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Why Kazuki Should Enter In India
Food Processing
India's pillar is actually farming. Business owners may discover several choices
within the meals feed farming as well as advertising sections. Ineffective
administration, insufficient facilities, correct storage space services results in
massive deficits associated with meals grain as well as refreshing generate within
Indian.
Organic farming
Natural producing has been around Indian because quite a long time. The value of
natural producing will certainly develop in a speed, particularly with numerous and
also the preferring just natural products. Business owners may concentrate on online
business offerings within this field. There are lots of small farmers that have followed
natural producing however the need continues to be unmet, providing numerous
possibilities for individuals who may market natural producing on the mass.
Indian features a part to try out like a accountable country within the utilization of
valuable sources, drinking water as well as power as well as within the have to
improve our own efficiencies within the technical programs such as power
preservation and so on Our own 380 energy through 320 mil loads associated with
fossil fuel provides just over 20 % effectiveness!
Indian Agro Products
Farming field may be the pillar from the countryside Indian native economic climate
about, that the socio-economic benefits as well as deprivations tools meant to, as
well as any kind of enhancements made on the framework is actually likely to
possess a related effect on the present design associated with interpersonal equal
rights. The expansion associated with India's farming field throughout the 5 decades
associated with self-reliance stay amazing in second. seven percent each year.
Regarding two-third of the creation development is actually assisted through benefits
within plants efficiency. The requirement dependent techniques followed because
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self-reliance as well as increased right after middle of the -- 1960s mainly dedicated
to serving the actual developing populace as well as the nation personal dependent
within meals creation.
Farming Field associated with Indian native Economic climate is among the most
important portion of Indian. Farming may be the just ways of residing for nearly two-
thirds from the used course within Indian.
Natural meals are forgotten about the book ‗concept‘ to become proven within
Indian. The actual recognition as well as approval associated with natural meals has
grown within larger towns. The rise within natural meals usage is actually apparent
through the undeniable fact that numerous natural meals providers tend to be
starting shops across the nation. The actual Natural Market features a restricted
amount of arranged gamers within the field presently. Wholesalers/ investors as well
as food markets have a determining rod within the submission associated with
natural products. Since much natural creation arises from little farmers, wholesalers/
investors take into account the sixty % discuss within the submission of those items.
Arranged suppliers disperse many via food markets along with via self-owned stores/
stores.
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SUMMARY OF GLOBAL/COUNTRY STUDY AND REPORT ON
SUMMARY OF TEA INDUSTRY
Economy of Kenya After independence, Kenya promoted rapid economic growth through public
investment encouragement of small holder agricultural production and incentives for
private industrial investment. From 1963 to 1973 GDP grew at annual average of
6.6%. During the same period agricultural production grew by 4.7%, animated by
opening new area of cultivation, diffusing new crop strains by redistributing estate.
Kenya economic performance declined between 1994 and 1990. Kenya‘s import
policy and rising prices made its manufacturing sector uncompetitive. A massive
intrusion in the private sector began by government. The domestic environment for
investment was less attractive due to lack of incentives in export, strong control on
imports, and controls on foreign exchange
IMF has given a chart of trend of gross domestic product of Kenya at market price.
Year 1980 1985 1990 1995 2000 2005 2008 2011
GDP 74940 143715 278502 614267 967838 1440408 - -
US dollar
exchange
7.42 16.43 22.86 50.42 78.58 75.55 78.90 96.85
More and more jobs of small scale business are provided in Kenya. They are able to
grow at , logically acceptable businesses with large but simplified regulations, that can
create more government avenue and jobs.
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Introduction of Kenya agricultural sector and Its role in Kenya economy
Since independence Kenya had depended heavily on the agricultural sector as the
base for economic growth, employment creation, and foreign exchange generation.
The sector is also the source of the country‘s food security, a stimulant of off-farm
employment, provider of raw materials for the processing sector, as well as a major
market for manufactured goods. Agriculture is even more important because 80% of
the country‘s population live in rural areas, 60% of whom eke their living from the
sector. Agriculture accounts for 24% of real GDP and 82% of the total labor force
(National Development Plan 2002-2008, GP, 2002).
1 Tea
Tea is the foremost foreign exchange earner contributing 20% of total export
earnings.
2 Horticulture
Horticulture brings together crops such as fruits, vegetables, herbs and spices and
cut flower. Horticulture has experienced rapid growth to take the third place in foreign
exchange earning. Kenya has emerged as the leading exporter of cut flowers to
Europe.
3 Sugar
Sugar canes are mainly grown in the Western Kenya belt. The sub sector has been
performing poorly over the past decade.
4 Sisal
Sisal is grown for its fiber but its commercial value has declined into insignificance.
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5 Miraa
Miraa (khart) is a stimulant herb that is chewed as pass-time alternative and
intoxicant. It is consumed both locally and abroad.
6 Pyrethrum
Kenya produces around 70% of the world‘s pyrethrum that is used as an essential
ingredient in the manufacture of pesticides.
7 Mixed crop farming
Mixed crop farming includes a whole range of crops such as potatoes, tomatoes,
certain vegetables, beans, and maize.
8 Other crops
There are several other crops including cotton, cashew nuts, bixa, livestock, rice,
wheat and fishing. Land used for crop and feed production is only 10%and less than
20% of land is suitable for cultivation, out of which 8% is medium potential land and
12% is classified as high potential (adequate rainfall) agricultural land. The remaining
land is dry or semiarid. Workers occupied in agriculture or food processing is above
80%. By using limited technology farming in Kenya is relatively done by small
producers who cultivate two or less than 2 hectares (about five acres). 75% of total
productions are, operated by about three million farming families. Farmers grow
large number of peasant cash crops although there is important European-owned
coffee, tea, and sisal plantations.
Social economy of the coffee industry in Kenya
Kenya is reputed to produce the best quality of Arabica coffee worldwide. Despite
the complement, the coffee sub-sector has experienced a prolonged period of
underperformance with production dropping from 127,000 tons to 86,000 (32.3%)
tons between 1987 and 2000 (Statistical abstract).
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Business, structure and function of Sasini ltd
Sasini is one of the leading tea and coffee producers in Kenya. The Company is
registered on the Nairobi Stock Exchange (N.S.E.) and is subject to the regulations
of the Capital Markets Authority (C.M.A.).
Through various wholly owned subsidiary companies the operations cover tea,
coffee, dairy livestock, horticulture, tourism and export activities. These operations
are spread all over the country.
Sasini House, located in Nairobi, the capital city of Kenya, houses is the corporate
head office where all the corporate operations are conducted. Their coffee, dairy and
horticulture operations are mainly located in the Central Province region of the
country, while tea operations are located in the west of Rift Valley in Nyanza
province.
Future Prospects
It has been a long and winding road for Sasini, from a little stream called Thathini to
the massive tea and coffee producers that we are. It has involved commitment, hard
work and proper planning.
At Sasini, they are honored to contribute to national, agricultural and industrial
development by continually improving their processes, systems and procedures to
achieve even better results in the coming years.
Coffee Trading
We trade in various qualities of coffee from our own estates and from the
conventional market i.e. The Nairobi Coffee Auction. Aristocrats Coffee and Tea
Exporters Limited has capacity to export any volumes of quality coffee to any part of
the world.
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Business
Sasini Ltd and its subsidiary companies have their operations in diverse sectors in
the agricultural industry. The company has invested in farming and processing of tea
and coffee, alongside interests in the dairy and horticulture sectors.
Asset Financing And Structure
The company‘s assets are mainly financed by shareholders‘ funds, which make up
Ksh 2.695Bn but of the company‘s asset base of Ksh 3.474Bn. Its creditors were
owed Ksh 235 Mn at the end of Q3 of 06, as the only current liability item.
Market
Most of the tea and coffee produced in Kenya is for export. About 4% of national tea
production is consumed locally, the rest is sold to the traditional market countries
among them Egypt and Pakistan. Sasini produces about 20 million kilograms of tea
annually, and this is dependent on prevailing weather conditions. Locally tea is sold
at Tea Auctions and its price is dependent on the grade.
Company Strengths:
Sasini being part of a group of the Sameer Group is able to access services like
banking and credit easily, and has benefited from experienced management.
The company has diversified product range with production at different regions;
this should cushion the company‘s earnings in case of unfavorable weather
conditions in one region. Most of its marketing and trading is handled by its
subsidiary company Aristocrats Coffee and Tea Ltd which is an international dealer,
the company‘s products sell at the best prices while credit risk is minimized.
Financial highlights:
Total asset 3474662
Share capital and reserve 190046
Current liability 235053
Turnover 810017
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Profit from operation 70455
Earning per share Sh 1.85
Interim Dividend Sh 1Per share
Background on the coffee industry in Kenya
Over the past two decades, the Kenyan economy has experienced stagnation and
negative growth rates. The economic problems can be attributed in part to the
overdependence on the export of basic raw materials, particularly agricultural
produce, which makes the economy subject to fluctuations in the world market with
far-reaching and detrimental consequences for national development.
The global perspectives of the coffee industry
In global terms, Kenya is not a large producer of coffee. Kenya‘s annual output is
approximately 1.5 million bags, accounting for roughly 2% of the global coffee
supply. Kenya Coffee, however, plays a unique role in the world coffee market, being
highly valued as a mild acidic blending coffee, used in small quantities by many
international roasters to moderate and improve their standard blends. This role has
been built over a period of more than 60 years, as a result of three major features of
the Kenyan coffee industry:
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Comparative position of Tea Industry
The tea industry has a very prominent place in the Indian economy. Even the
poorest of the Indian household buys tea for his daily consumption. Tea is the
country‘s primary beverage (almost 85% of total families in the country buy tea),
which makes India the largest consumer of tea in the world. In terms of employment,
it is the second largest industry by employing more than a million people directly and
indirectly 2 million people out of which 50% are women. The tea industry, relatively
at a greater side, hits the economies of the regions where the tea gardens are
concentrated, example Assam.
Regulation
In India tea industry is highly regulated. It requires licenses for import or export.
While The Tea Act, 1953 controls production and distribution activities, the Tea
(Marketing) Control Order, 2003 regulates tea sales and stipulates that a specified
percentage of tea manufactured from each garden should be sold by the auction
system. In addition to this central Cess, States also impose sales tax on sales of tea.
Gaining from production and sale of tea are mattered to agricultural income tax by
the states. Thus, after paying corporate tax the residual income is taxed again. .
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Completion
Competitive intensity in the Indian tea industry is on the increase as…
The sheer number of players has increased. On account of difficult export market
conditions better realization in packet tea, more number of Indian players prefer to
concentrate on domestic market.
Concerns of Indian tea sector
One of the major constraint facing the Indian tea industry which directly affect
production, productivity and quality, include the old age of bushes with more than
30% of the tea area being above the economic threshold age limit. In addition the
slower pace of replantation with the rate of replanting being less than 0.5% as
against the desired level of 2% and the consistent fall in auction prices during the
early-2000 has adversely affected the investment in the plantations.
Indian black tea production to grow by 1.6% pa in 2014
World black tea production is estimated to grow by 1.7% per annum to 2.7 mt in
2014, due to improvements in yields. In India, outputis expected to grow by 1.6% per
annum between 2004-14 to 01 mt. Out of other major black tea producing countries,
output in Sri Lanka is supposed to increase 1.9% pa to 0.37 mt in 2014. Black tea
production in China is regard less to decline, as the balance of production shifts to
other tea with stronger market prospects.
Tea growing in Kenya:
Tea is mainly grown in several mountains. However the two types of Camellia with
districts which include Kericho, Bomet, Nandi, Kiambu, stimulant properties
developed separately. Camelli Thika, Maragua, Muranga, Sotik, Kisii,
Nyamira,sinensis Var. sinensis on the northern slopes of Himalayan Nyambene,
Meru, Nyeri, Kerinyaga, Embu, Kakamega,while C. sinensis Var. assamica on the
southern region Nakuru and Trans-nzoia. In these areas the crop enjoys
and adjoining plains. The Cambodian type makes the 80% favorable weather
patterns.
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The Kenya Tea Development Agency (KTDA):
Kenya Tea growers under the umbrella of Kenya Tea Development Development
Agency‘s predecessor the Kenya Tea Agency (KTDA) account for sixty percent of
the total tea Development Authority, was established in 1964 by an act production
while the multinational sector and large scale of parliament as a parastatal charged
with the growers account for the remaining forty percent. The responsibility of
developing and fostering the young and establishment of an efficient estate sector
under the nascent small scale growers sector.. The selection of factories are owned
by 380,000 growers who cultivate high yielding varieties mainly by the Tea Research
92,800 ha of tea.
Present trade and business position of India with Kenya.
The East African coast and the west coast of India have long been linked by
voyages of merchants. India was among the first countries to establish an office in
Kenya. The Indian Diaspora in Kenya has contributed actively to Kenya‘s progress.
Many Kenyan have studied in India. In recent times, there is a growing trade (US$
1.5 billion in 2010) and investment partnership. Indian firms have invested in
telecommunications, petrochemicals and chemicals, floriculture, etc. and Indian firms
have executed engineering contracts in the power and other sectors.
TRADE
Bilateral trade grew at 28% in 2008 and turnover was over US$ 1.5 billion in
2009-10. India is Kenya‘s sixth largest trading partner. According to Kenyan
statistics, the figure for January–April 2011 is approximately US$ 650 million.
Review of Bilateral Trade:
Both sides reviewed the developments in their bilateral trade and noted that
the volume of bilateral trade has shown remarkable growth since 2005-06. Bilateral
Trade has grown from US $ 625 million in the year 2005-06 to US $ 1,530 million in
2009-10, registering a growth of 145 % in the last 4 years.
Trade in coffee sector
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Both sides agreed that there is tremendous scope for investments in coffee sector in
Kenya mainly in the areas of coffee growing, coffee milling, value addition and
retailing. India has greater entrepreneurial talent in medium and large scale coffee
plantations as well as in retail café chains. In this regard, the Indian Coffee Board
has invited the interested Indian investors in different segments of coffee Industry for
setting up of Joint Venture partnerships with Kenyan investors.
Kenya Top Ten Exports
Sr.no Products
1 Metallic salts and peroxysalts, of inorganic acids
2 Vegetables, fresh, chilled, frozen or simply preserved (including dried
leguminous vegetables); roots, tubers and other edible vegetable products,
3 Other crude minerals
4 Tea and mate
5 Leather
6 Wool and other animal hair (including wool tops)
7 Lead
8 Non-ferrous base metal waste and scrap
9 Pearls, precious and semi-precious stones, unworked or worked
10 Textile and leather machinery, and parts thereof
Top Ten Imports
Sr.no Products
1 Petroleum oils and oils obtained from bituminous minerals (other than crude);
preparations, n.e.s. containing by weight 70% or more of petroleum oils or of
oils obtained from bituminous m
2 Medicaments (including veterinary medicaments)
3 Flat-rolled products, of iron or non-alloy steel, not clad , planted or coated
4 Electric power machinery (other than rotating electric plant of heading and
parts thereof ,
5 Food-processing machines (excluding domestic) and parts there
6 Textile yarn
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7 Electrical machinery and apparatus
8 Motor vehicles for the transport of goods and special purpose motor
9 Equipment for distributing electricity,
10 Other machinery and equipment specialized for particular industries, and
parts thereof,
POLICIES AND NORMS OF INDIA FOR IMPORT/EXPORT OF TEA
LICENSING Distributors and Exporters to obtain business licence:
Only under a business licence obtained in accordance with the provisions of the
order the distributor shall carry on the business of distributing imported tea and
exporter shall export tea or export imported tea. The order is as below: An agent‘s
overseas principals shall not be required to take out a separate business license as
exporters provided that where an agent has taken out a business license.
Also no business licence shall be required for tea exported:-
(a) By or on behalf of the Tea Board or the Central Government;
(b) By means of a postal parcel;
(c) As samples to foreign buyers;
(d) For any non-commercial purposes;
(e) As personal possessions of passengers.
Application for business licence or permanent business license:
(1) Every exporter and every distributor shall make an application in duplicate to the
Licensing Authority in Form A who desires to obtain a business licence.
(2) Every licensee who is an exporter shall make an application, three months before
the expiry of the validity of a business license, in duplicate to the licensing Authority
in Form B who desires to convert his business license into a permanent business
license.
Application for Certificate of Origin for tea selected as Geographical
Indication:
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Every applicant shall make an application in duplicate to the Licensing Authority in
Form C who desires to obtain a Certificate of Origin in respect of teas exported or
distributed by him which has been produced and manufactured in any tea producing
areas in India and designated as Geographical Indication under the Geographical
Indications of Goods Act 1999.
Non-Preferential Rules of origin:
Every exporter who desires to obtain a Non- Preferential Certificate of Origin shall
make sure conformity with the following rules of origin of teas meant for export and
the exporter shall also submit a declaration along with documents as specified in the
notes that are attached to the Certificate of Origin as indicated in Form E:
(1) Any exporter from India shall be eligible for obtaining a Certificate of Origin from
the Licensing Authority, or from any officer of the Board, duly authorized by the
Licensing Authority, or from any inspection agency duly approved by the Licensing
Authority, if such tea conforms to the origin requirement under any one of the
following conditions:
(a) Tea wholly produced or obtained in India as defined in sub-paragraph
(b) Tea not wholly produced or obtained in India provided that the tea is eligible
under sub-paragraph.
Grant and refusal of business license/permanent business license to
Exporters: The Licensing Authority may refuse to grant a business license to any
applicant and shall provide him with a copy of the order so passed, for sufficient
reasons to be recorded in writing
Before passing an order of refusal, a chance of being heard shall be granted to the
applicant.
(1) The Licensing Authority shall grant the applicant a business license in Form F.
(2) The Licensing Authority may, on receipt of application made to it, convert a
business license issued into a permanent business license if:
(a) The business licensee is an exporter;
(b) Such business licensee has not violated any provisions of the Tea Act,
1953 or Tea Rules, 1954 or Tea Board Bye-Laws, 1955.
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Grant and refusal of business licence to distributor:
The Licensing Authority may decline to grant a business licence to any aspirant and
shall also furnish him with a copy of the order so passed for sufficient reasons to be
recorded in writing.
Grant and refusal of Certificate of Origin for tea selected as Geographical
Indications:
The Licensing Authority or any officer of the Board who is not below the rank of Joint
Controller of Licensing and is duly certified by the Licensing Authority may, refuse to
grant a Certificate of Origin to any applicant and shall furnish him with a copy of the
order so passed for sufficient reasons to be recorded in writing.
Period of validity of business licence
The business licence for all exporters shall be valid for a period of 3 years from the
date of issue and once renewed it shall also remain valid for a further period of 3
years from the date of renewal unless it is cancelled or suspended during the validity
period. Every permanent business licence for an exporter shall remain valid unless
consequently annulled or suspended.
Signing of business licence or permanent business licence:
Any business licence issued or renewed may be signed by the Secretary or by any
other officer, not below the rank of Controller of Licensing of the Tea Board for and
on behalf of the Licensing Authority.
Signing of Certificate of Origin:
Any Certificate of Origin issued may be signed by any officer of the Board or by the
Secretary or not below the rank of Joint Controller of Licensing or by any inspection
agency duly approved by the Licensing Authority.
Fee:
The following fees either payable in cash or DD is to be paid for every application for
the grant of a business licence or renewal
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(a) 1st issue with a validity period of 3 years and consequent renewal with a validity
period of 3 years, the fee is Rs.1000;
Conditions of business licence:
(1) Every business licence shall be granted or renewed individually to the business
licensee and no business licence shall be sold or transferred.
(2) Where a business licensee sells or transfers his business to another person, the
purchaser or transferee shall obtain a fresh business licence in agreement with the
provision of this Order.
Business licensees to meet the terms with certain requirements:
In regard to the packing and marking of containers of tea every business licensee
shall meet the terms with the following requirements:-
(a) Every container in which tea is packed shall have the particulars that may from
time to time be specified by the Licensing Authority;
(b) Every container shall be packed and sealed in such a way that the contents
cannot be tampered with except by making a noticeable opening in the container;
Import Export Policy of Kenya
Import Policies, Procedures and Institutions 1 Goods Trade
a) Applied Tariff Structure
Since coming into force under the EAC Protocol establishing the EAC Custom Union
on January 1, 2005, the EAC Common External Tariff (CET) had been Kenya‘s main
instrument of import policy.
b) Tariff Bindings
Kenya's tariff bindings cover 14.9% of its total tariff lines. Tariffs are bound at a
ceiling rate of 100% for all agricultural products. For non-agricultural products, Kenya
has bound six tariff lines (at the HS four-digit level), equivalent to 1.6% of non-
agricultural tariff lines; at 62% on fresh, chilled, or frozen fish (HS 03.02 and 03.03),
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excluding fish fillets and other minced fish meat; 35% on medicaments (HS 30.03);
18% on pharmaceutical goods (HS30.06); 62% on mineral or chemical fertilizers (HS
31.05) containing two or three of thefertilizing elements, potassium, phosphorus, and
nitrogen; and 31% on polymers of ethylene in primary form (HS 39.01). The tariff on
the tractors" (HS 87.01.90) is bound at 62%.
c) Duty Exemptions and Waivers Kenya currently grants tariff exemptions on goods
used by charitable bodies, churches, and approved educational institutions; the
military and police; official aid-funded projects; in emergency situations; and by
diplomatic and international organizations. In addition, samples and exhibits/displays
for trade fairs may be imported into Kenya duty free However, the introduction of the
CET, with its increased share of zero tariffs, has made redundant a number of
previous tariff concessions.
Import Licensing
Kenya has imposed import licensing procedures to conserve foreign exchange.
Import licenses are issued by the Ministry of Commerce. The ministry must receive
an import license application by the Kenyan importer before orders are placed
abroad.
Import Duties
Kenya is a signatory to the General Agreements on Tariffs and Trade. Kenya uses a
single-column tariff based on the Harmonized System. All charges and duties are
payable in Kenyan shillings. Duties are assessed on the c.i.f. value comprising the
original cost of the goods plus freight and insurance..
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.Export Policies and Measures Affecting Exports
2.4.1 Goods Trade
The trade policy instruments available for exports include: export taxes and charges,
export prohibitions, restrictions, and licensing; export subsidies and incentives;
export promotion and marketing assistance, and export finance, insurance, and
guarantees.
a) Export Taxes and Charges
The registration formalities for imports of goods for commercial purposes under the
Customs and Excise Act also apply to exports. Specifically, all exports must be
carried out on the basis of a certificate.
b) Export Prohibitions, Restrictions, and Licensing
Kenya prohibits the exportation of certain products such as the firearms and
ammunition. Permit is required for exports of most agricultural products, food,
minerals, and mineral products. Exports of certain agricultural and food products are
subject to special licences to ensure that the country remains self-sufficient in these
products.
c) Export Subsidies and Incentives
Kenya does not grant any export subsidies, nonetheless, three incentives schemes
are available to Kenyan companies to encourage export-oriented activities. These
are the Export Processing Zones (EPZ) Scheme, the Manufacturing Under Bond
Scheme (MUB), and the Duty Remission Scheme.
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(i) Export Processing Zones Scheme
The Export Processing Zones Scheme, established in 1990, allows for duty and
VAT exemption on imported machinery (except motor vehicles) and raw materials.
Besides high-quality infrastructure, companies located in EPZs benefit from a ten
year corporate tax, income, and withholding tax holiday; exemption from stamp
duties; and a 100% investment allowance (applicable over 20 years).
(ii) Manufacturing under Bond (MUB)
The Manufacturing under Bond (MUB) Scheme was introduced in 1989. Under
the scheme, firms exporting their total output are exempted from payment of
import duties and VAT on inputs, including plant, equipment, and raw materials.
d) Export Finance, Insurance, and Guarantees
Kenya does not have any public export finance, insurance or guarantee schemes.
However, African Trade Insurance Agency (ATIA) and the Multilateral Investment
Guarantee Agency(MIGA) provide multilateral import and export credit and political
risk insurance guarantee. Export finance and insurance must be taken with private
companies whose prices are market-determined.
Kenya Trade, Exports and Imports
Kenya is largely a trade deficit country. The negative balance of trade occurs
because the country's exports are vulnerable to both international prices and the
weather conditions. Since independence, Kenya has enjoyed close international
relations, particularly with the western countries.
Kenya Trade: Exports
Agricultural productivity is central to Kenya's export industry. More than 75% of the
population is engaged in agriculture and allied activities, which contribute almost
25% to the national production.
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Kenya Trade: Imports
Kenya‘s imports include machinery, transport equipments, motor vehicles, metals,
plastics and electrical equipments. India and the UAE are the largest import partners
for Kenya. In 2009, both countries accounted for more than 11% of the total import
volume. Other major import partner countries are China, Saudi Arabia, South Africa,
Japan and the US.
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TREND IN INDIA’S EXPORT AND IMPORT
Exports:
India‘s exports reached 178.7 bn during 2009-10 .A negative growth of 3.5 percent
was found as compared to a growth of 13.6 percent in the previous year.
In spite of the deceleration of the growth in 2009-2010, India‘s export sector has
shown amazing flexibility in recent years.
India‘s exports recorded a compound annual growth rate (CAGR) of 22.0 percent
during the five year period from 2004-05 to 2008-09 as compared to the preceding
five years. In this period the exports was recorded by a lower CAGR of 14.0 per cent.
Compared to other economies of the world during the phase of global slowdown
India‘s exports were not affected up to such extent. India‘s exports increased by 3.4
percent in October 2009 after deteriorating constantly for the first seven months in
the year 2009-10.
Exports growth rate in 2009-2010 are as follows:
Month Percentage growth
November, 2009 30.0 December, 2009 20.3 January, 2010 18.7 February, 2010 34.8 March, 2010 54.1 April,2010 42.1 May, 2010 34.1 June, 2010 46.5 July, 2010 13.8 August, 2010 23.3 September, 2010 23.8
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TRADE BARRIERS IN INDIA
Low wages
In India workers who work on smallholder gardens get paid at much lower rates than
compared to at the estates. These workers hardly have any rights compared to their
plantation counterparts.
Health and safety
In India and other places, tea gardens‘ workers are often isolated from normal
society and communication with normal society is very low. T
Discrimination and gender
In most countries women do most of the fieldwork on tea plantations. Women are the
preferential workers on tea estates, because they are considered better pickers and
are more passive and tied to the plantation.
Gender and declining workforce
As mentioned above, most of the workers in the tea sector are pickers and the
majority of these are female. They have often had very little education, but they have
the skills for picking tea leaves, handed down by the previous generations. In Sri
Lanka, for example, the country‘s male literacy rate is 95%, while among the
plantation males it is 88%. The female literacy rate is 91%, while among the
plantation women it is 75%
Soil Fertility
When the same plot is being used continuously for a single crop it leads to
negatively affected soil fertility, which is magnified because tea is often grown on
slopes. To compensate for this loss both inorganic and organic fertilizers are applied.
This all leads to a negative spiral which needs increasing amounts of agrochemicals,
in order to maintain production in inverse proportion to the decreasing soil quality.
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Limited market channels
Small tea farmers are mostly price takers. They may sell their green leaves to
middlemen, plantations or processors.
In order to prevent loss of quality, after picking the leaf, they need to get their
produce to a processing factory as quickly as possible.
Low level of organization and representation
In India there is a limited group of tea smallholder. These tea holders may be
organized in many different ways i.e. from co-operatives to self help groups.
SWOT ANALYSIS OF TEA INDUSTRY OF INDIA:
Strength:
Demand for tea has been growing at some 2% per annum and should accelerate
further
Technical & Manpower Skill
Due to a huge population base in India Technical &Manpower Skill is available in
abundant.
Good Research Support by tea growers has will help industry grow further.
Weaknesses:
Tea industry is labor intensive
Problem of skilled labor in the near future can be posed since the second
generation labors are reluctant to join this industry
Companies did not adopt Effective Cost Management system and other regulatory
bodies in India.
Supply of tea available from more efficient players like Kenya, China, Sri lanka
Declining Export of India over the years.
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Opportunities:
There can be potential of export if India can increase its production capacity to
make tea more acceptable and fashionable like coffee in market
There are opportunities to come up with new flavors/formulation of the tea, tea
houses etc to popularize the concept of tea in India.
Availability of large untapped rural market for branded tea companies like Hul and
Tata Tea
Threats:
There is global competition
Indian tea market is threatened due to low cost in some countries like China, Sri
Lanka and Kenya.
Import of Tea from other countries is a threat for domestic player
Cost escalation on account of increase in the cost of production
TEA INDUSTRY IN GUJARAT
Waghbakri Company is a family owned tea business amongst conglomerates and
mega corps mainly in Gujarat that tower the International business scenario all over
the world. Waghbakri house is one of the largest tea producers and sellers in
Gujarat and in India today. Waghbakri is making leading strides in tea exports and
ships in bulk and retail consumer packing to countries all over the world.
History & Group Profile Waghbakri Tea House:
With blessings from Mahatma Gandhi, In year 1892 Sir Narandas Desai set foot on
Indian soil after achieving experience in tea business as an owner of tea garden in
South Africa which then was dirt in racial misgivings that made continuity of his
business a useless there.
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Sir Narandas Desai started Waghbakri Tea Company in the yr 1892, which then was
represented by small company retail shop at kalupur Ahmadabad, Gujarat.
Since then the growth of the effort has been extraordinary and presently Waghbakri
Tea Company has an employee base of more than 400 professional managers and
skilled personals with ever increasing space for more, to tend to the expanding group
enterprise in India and abroad.
Business Opportunity between India and Kenya in Tea Sector
India is in CTC teas and in that the competition is with Kenya. Kenyan teas coming
from relatively younger bushes have quality that is better suited for tea bags. Their
labour costs are comparatively lower. Therefore, the tea industry in Kenya is more
competitive than the Indian tea industry as is reflected by India‘s diminishing
leadership in key markets. Kenya has taken over India‘s leadership position in
almost all the key markets. As a matter of fact India is no more a key competitor in
the global tea markets. The Indian tea industry is becoming less and less competitive
and Indian firms are surviving mainly in the niche markets that are characterized by
imports in commodity form.
Conclusion
Kenya seems to be having good potential and huge trade and investment in
future.
kenya is one of the largest tea & coffea producing country in the world
Investment of India in Kenya has been rising high. There is also a growing
trend of Kenya investment in India.
There is a considerable importance of tea industry in Indian economy,
producing 4th annual world tea
Both the country India and Kenya are well established in tea sector
Both of them are trying to over their trade barriers.
India is also increasing its technical skill and man power to increase its share
in export of tea market.
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SUMMARY OF GLOBAL/COUNTRY STUDY AND REPORT ON
POWER GENERATION MARKETS
Renewable energy accounted for approximately half of the estimated 194 GW of
new electric capacity added globally during 2010. Existing renewable power capacity
worldwide reached an estimated 1,320 gigawatts (GW) in 2010, up almost 8% from
2009.5 Renewable capacity now comprises about a quarter of total global power-
generating capacity (estimated at 4,950 GW in 2010) and supplies close to 20% of
global electricity, with most of this provided by hydropower. 6 /I (See Figure 3.)
When hydropower is not included, renewables reached a total of 312 GW, a 25%
increase over 2009 (250 GW).7 (See Table R4.) Among all renewables, global wind
power capacity increased the most in 2010, by 39 GW. Hydropower capacity
increased by about 30 GW during 2010, and solar PV capacity increased by almost
17 GW. The top five countries for non-hydro renewable power capacity were the
United States, China, Germany, Spain, and India. Including hydropower, China, the
United States, Canada, Brazil, and India tied with Germany, were the top countries
for total installed renewable energy capacity by the end of 2010.8 (See Top Five
Table on page 15 for other rankings; see also Figure 4.) Data are not readily
available to provide a global ranking for categories such as increased share of
electricity from renewables or per capita consumption, although these would be
valuable measurements of progress.
In the United States, renewable energy accounted for an estimated 25% of electric
capacity additions in 2010 and 11.6% of existing electric capacity at year‘s end;
during the year, renewables provided just over 10.3% of total domestic electricity.9
Further, renewables accounted for about 10.9% of U.S. domestic primary energy
production (compared with nuclear‘s 11.3% share), an increase of 5.6% relative to
2009.10
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China led the world in the installation of wind turbines and solar thermal systems and
was the top hydropower producer in 2010. The country added an estimated 29 GW
of grid-connected renewable capacity, for a total
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of 263 GW, an increase of 12% compared with 2009. Renewables accounted for
about 26% of China‘s total installed electric capacity in 2010, 18% of generation, and
more than 9% of final energy consumption.
Solar photovoltaic (PV)
Capacity was added in more than 100 countries during 2010, ensuring that PV
remained the world‘s fastest growing power-generation technology An estimated 17
GW of PV capacity was added worldwide in 2010 (compared with just under 7.3 GW
in 2009), bringing the global total to about 40 GW – more than seven times the
capacity in operation five years earlier.101/I (See Figure 7.)
The EU dominated the global PV market, accounting for 80% of the world total with
about 13.2 GW newly installed – enough to meet the electricity consumption of some
10 million European households.
The trend toward utility-scaleI PV plants continued, with the number of such systems
exceeding 5,000 in 2010, up from just over 3,200 in 2009.119 .120 The EU
continued to lead with 84% of the global total by year‘s end, with Germany alone
accounting for about one-third of global additions.121 By year-end, Spain had 32%
of total installed utility-scale capacity, followed by Germany (26%), Italy (16%), the
United States (7%), and the Czech Republic (6%).
Other countries with utility-scale facilities by early 2011 included Bulgaria, China,
Egypt, India, Israel, Mali, Thailand, and the United Arab Emirates (Abu Dhabi) – or a
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total of at least 30 countries.123 As with wind power, the trend is toward increasing
project size, with nine of the world‘s 15 largest PV plants completed in 2010.124 At
the end of 2010, the world‘s largest PV plant in operation was the 0.08 GW Sarnia
facility in Ontario, Canada, which is expected to power 12,800 homes.
Yet there is growing interest in off-grid and mostly small-scale systems, particularly
in developing countries but also in developed countries. In Australia, an estimated
70% of solar PV is off-grid at remote homes, farms, and other locations, including the
country‘s largest PV tracker system, installed in 2010 as part of a hybrid solar/diesel
power station in Western Australia.
Solar heating and Cooling
Solar water heating technologies are becoming wide- spread and contribute
significantly to hot water production in several countries. China, Germany, Turkey,
India, and Australia led the market for newly installed capacity during 2009, with
China, Turkey, Germany, Japan, and Greece taking the top spots for total
installations by the end of that year.
Total EU additions in 2010 came to 2.6 GWth, down 10% relative to 2009 and nearly
19% below the 2008 market, installations declined for the second year in a row (off
26% relative to 2009) due greatly to the temporary halt and restructuring of the
national rebate program, and to decreasing natural gas market prices. The share of
combination systems for both water and space heating increased to about two-thirds
of the market.
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Brazil added about 0.6 GWth in 2010. Outside of China, Japan and India represent
the largest markets in Asia. During 2010–11, India added about 0.35 GWth (0.5
million m2) of solar heat capacity for an estimated total of 2.8 GWth (3.97 million m2)
at the end of January 2011.
The U.S. market (excluding unglazed swimming pool heating) is still relatively small
but is gaining ground.
SOLAR ENERGY SECTOR IN KENYA
Kenya has the largest private sector dominated solar PV home systems in a developing nation, with annual growth rates of 10 - 20% in recent years. There are 25 - 40 players (of which 5 are main players) in trade in solar energy goods and service. Kenya is endowed with ample solar energy resources, with annual averages over 5
kWh/m2/day available throughout the country. In the North of the country and along
the Lake Victoria basin, solar energy resources are generally higher and more
consistent. In the populated areas near Nairobi, Mt Kenya and the Aberdares, solar
irradiation is considerably reduced during the cloudy season between May and
August.
Total installed capacity of solar electricity is likely to be over 8-10 MW based on 15
years of sales over 500 kWp/year. In 2008, key players estimate that the total market
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was in the region of 1-1.3 MWp. Annual solar water heater sales are of the order of
5000 x 2 m2 units.
By African standards, Kenya‘s market is well-developed, though largely based on
over-the-counter sales of PV components and solar home systems (SHS). Niches for
institutional systems, battery back-ups, pumping, tourism and telecom have
developed rapidly and are helping to drive the sophistication of the market forward.
The solar water heater sector may grow faster than the PV sector in the near future
because of increase prices for electricity and petroleum fuels as well as policy
changes.
There are 15-20 major suppliers of solar equipment in Kenya and three
manufacturers of SLI-type lead acid batteries. In general there is a good availability
of PV modules, batteries, inverters, charge regulators and appliances. The value
chain has reached into rural areas where there is a relatively strong foundation of
experienced (if uncertified) basic level installers. The quality of the equipment
remains an issue because the low end of the market is extremely cost conscious and
competitive.
The Solar PV Market
Kenya has one of the most dynamic commercial PV markets in Africa with a non-
subsidised demand of 1-1.3 MWp per year that has been growing at an annual rate
of 15 % since the mid 1990‘s. Fuelled by consumer demand from a relatively
prosperous non-electrified rural population, support from NGO/missions, and
growing government interest, a strong consumer chain has developed that is
effective in supplying and installing solar home systems and institutional systems
throughout the populated areas of the country.
The capacity of the market to install and sell is mostly limited to systems below 1.5
kW in the categories outlined. Table 1 below breaks down the main market
segments of the existing Kenya solar PV markets.
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Main Market Segments of the Solar PV Market in Kenya
Solar PV technology
Estimated
capacity installed
Estimated
financial olume
Degree of
competition
Off grid HH
electrification and
small scale
commercial
>700 KW > 5 million euros Extermely
competitive
Many players
Off-grid community
Systems
>250 KW >2.5 million euros Dominated by
wholesaler
telecom >100 Emergent – few
players
tourism N/A N/A Emergent
Off-grid household and small-scale business electrification Off-grid household electrification in Kenya began in the late 1980‘s following the
coverage of the most densely populated rural areas with television signals. During
the ―boom period‖ of coffee and tea in the early to mid 1990‘s, small-scale farmers
who could not access the electric grid began to buy 12-volt televisions, radios and
lighting systems, and this fuelled strong demand for solar electric systems. Today
this portion of the market is highly competitive and mature, though it does suffer from
sub-standard quality issues in installation and components.
Rural demand for solar PV systems follows household demand for lead acid
batteries, which has penetrated 15-20 % of the rural and peripheral urban market.
Thousands of town-based small-scale grid based entrepreneurs in rural towns
charge batteries for the rural population in a business worth tens of millions of dollars
per year. The battery manufacturers in Nairobi all offer unconditional one year
warranties on their modified SLI batteries, meaning that the purchase of such
batteries provides reasonable access to 100-200 Wh of DC electricity per day over a
full year.
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Off-grid community / institutional systems Kenya has many active NGOs and missions that provide services in the remote off-
grid parts of the country . These groups set up infrastructure that provides a demand
for PV power systems.
Catholic Church orders set up missions in remote areas that provide church,
school, health and water facilities that often utilise solar PV for their electricity
demands.
NGO office power, laboratory and clinic equipment, school lighting and
community water pumping.
Exports to Sudan and Somalia. Many of the off-grid PV systems for Somalia
and Sudan are sourced from Kenya and small Kenyan companies are used to
provide installation services.
Since 2005, the government Rural Electrification Programme has installed PV
systems in over 150 schools in remote off-grid parts of the country. The total
capacity of installations between 2005 and 2009 is approximately 450 kW, with work
completed by two companies (procurements totalled over KES 338M). The
government procurement programme is said to be extended and may offer additional
opportunities for interested companies.
The government policy set solar PV targets for sparsely populated, remote areas in
the Northern and Eastern regions of the country. A recent rural electrification master
plan study identified ample opportunities in solar-assisted mini-grids, and the
government may support this type of procurements in the future.
The Solar Water Heating Market
Solar water heaters have a well-established market in Kenya and have been sold in
the country for twenty years. In 2008, between 8,000 m2 and 10,000 m2 were
installed. With constantly increasing electricity prices and planned changes in
government policy, the market for solar water heaters is likely to significantly
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increase in the next five years. Estimates vary widely on the existing installed
capacity of solar water heaters, as many of the units installed in the 1990‘s are no
longer working. Table 2 outlines the sales of solar water heater and the market
structure
Technologies used for solar water heaters include direct and indirect flat plate units,
as well as vacuum tube collectors. Although local manufacturing and assembly of flat
plate thermosyphon-type collectors was common in the 1990‘s, virtually all collectors
are imported today5. The main exporting nations of units to Kenya are Greece,
Australia, Turkey, Israel, and China. A few companies manufacture their own water
tanks.
LOCAL CAPACITIES
Solar PV
Outside of the solar companies themselves, Kenya has no organised solar energy
training programmes for artisans or engineers. It does have some University-level
courses in alternative energy, but these are fairly basic and do not prepare ―solar
engineers‖ per se.
There have been a number of courses offered as part of international agency funded
projects (such as IFC PVMTI6) and donor/NGO-supported initiatives. An example of
the latter is from the 1990s when several NGOs offered regular training courses for
PV artisans. Courses similar to these, primarily targeted at the SHS market, have
been offered around the country. Thus, there is a base of capacity in Kenya for the
installation of SHS, institutional systems, inverter-battery backup and pumping
systems even though most installers do not have formal training.
There is a lack of capacity for design and installation of large complex systems in the
industry as a whole. Thus, when it comes to design and specification of systems
above 1 kWp there is a lack of significant engineering capacity at all levels. This lack
of capacity has limited the PV industry to the supply of small systems and prevented
―upward‖ expansion of the market to more complex systems.
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In general, large companies do not handle installation of small systems. They hand
these over to agents or specialist installers (who often market systems on their
behalf) or systems are simply self-installed (>30 %). When there is a need to install
or design large systems companies often call upon the international supply
companies to bring in expertise.
For the size of the market, there is a sufficient pool (> 50) of experienced solar
technicians in Kenya who can handle the installation of pumps, institutional systems,
inverter backups and other ―medium‖ sized systems.
General solar technicians that serve the smaller SHS market usually do not have
formal PV training or accreditation - most training is on-the-job or under the
supervision of experienced solar installers. A 2003 study of 300 solar technicians
that had installed more than five systems found that less than 5 % had received any
formal solar PV training at all.
Many sales engineers offering systems to consumers do not have sufficient training
in design of systems - their poor engineering of systems contributes to the view that
solar PV is a ―second class‖ technology.
Solar Water Heating
The human capacity for solar water heating is largely a similar situation to PV.
However, because of the smaller market activity in solar water heaters, the pool of
available plumber/technicians is smaller. As well, problems with water quality and
supply compound installation issues and increase the complexity of solar water
installation.
Virtually all installations of solar water heating are single-unit thermo-siphon type.
Only a handful of institutional large-scale solar water heater systems with centralised
storage, pumped circulation and thermostat regulation have been completed.
Most training for SWH installations is done in-house at companies. Similarly to PV
companies, SWH companies suffer from a fairly rapid turnover of staff and a
migration of staff into the independent market, resulting in a relatively low capacity of
some companies to deliver consistent quality.
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UNDEVELOPED MARKET OPPORTUNITIES
Solar Hybrid PV Systems and Tourism
Virtually all off-grid tourism sites in Kenya rely on generators for electrical
requirements (lighting, pumping, refrigeration, communication, etc). Rising prices for
fuel, theft, and a ―greening‖ of expectations among tourists is driving off-grid facilities
to reduce dependence on generator power. Some tented camps have installed
hybrid solar PV systems, and other lodges are installing inverter-battery back-up
systems so that they run equipment when generators are off.
Tourism companies are generally aware of solar energy and interested in pursuing it
as an energy solution (especially for water heating), but specific awareness of the
right technology and their appropriateness to particular applications is low. Tourism
companies use the top 3 suppliers (Davis Shirtliff; Chloride Exide; Wilken) based
upon relationships built over the last decade. They are extremely risk averse in
investment strategies with new technologies and this approach has been greatly
exacerbated by high numbers of unreliable and questionable companies that
approach them.
Applied technology Solar PV stand alone power for small tented camps
Hybrid solar generator systems for mid-sized camps and lodges
Solar water heaters for all camps and lodges
Solar electric fencing, telecommunications, solar pathway
lighting
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Size of opportunity Solar PV stand alone and hybrid solar generator systems for camps and odges >2.5 MW Solar water heaters for camps and lodges Solar Hybrid PV Systems and Telecommunications
Kenya currently has four mobile phone providers and there are approximately 8,000
base transmission stations (BTS) in the country. Half of these are owned by the
largest operator Safaricom. Approximately 25 % of all base stations (2000) are off-
grid and out of these only about 50 are powered using wind/diesel or solar/diesel
hybrids and 150 utilise inverter-battery backup systems. ample opportunity to work
with local companies to build up solar hybrid powered power sources, as they have
lower costs and are more reliable.
Opportunities in Solar Hybrid PV Systems and Telecommunications
Applied technology
Solar / Wind and diesel hybrid systems Battery backup systems for BTS powered by diesel gensets Small PV systems for VSAT, phone charging and other applications Opportunities Base stations Wireless communication / internet HF / VHF Consumer / cell phone charging
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Solar Hybrid PV Systems and Village Mini-Grids
The Kenyan Government, through the Rural Electrification Agency (REA) and the
Ministry of Energy (MoE), has set about embarking on an aggressive rural
electrification programme that is likely use solar PV in mini-grids and off-grid hybrid
diesel generation. Although funding is not identified, there is a strong possibility for
support from the Kenyan Government and the World Bank.
A recent study, carried out for the Ministry of Energy by Decon (a German consulting
company), analysed the development of remote off-grid sites and recommended
approaches for meeting their electricity needs. Currently, the primary approach is
remote generator sets feeding power into mini-grids and isolated solar PV systems
for institutions. Over USD 100 million in opportunities for renewable projects is
outlined in the 2008 Rural Electrification Master Plan. See section 3 for more
information on this study.
Solar PV Grid-Connected It is predicted that consumer demand for grid-connected PV (in response to the need
for demand-based solutions for load shedding), and development of grid-connected
policy by other African states (including South Africa) will eventually lead the Kenyan
Government to enact grid-connected policies and it may happen faster than
previously expected.
Companies are exploring a variety of approaches for grid-connected PV ranging
from large scale power plants to individual house systems. For example, a large
Indian-US PV generation group has met with the Kenyan Prime Minister and
discussed the potential of large grid-connected projects (>50 MW).
127
Company Introduction
Go Solar Systems Ltd.
Go-solar Systems Ltd is an alternative energy company run be highly qualified
professionals that have a strong back ground in electrical engineering and renewable
energy. We have undertaken numerouse projects for Ngo's , governments of Kenya
and South Sudan as well as various public and private institutions in the East African
region.
In the past seven years , Go Solar Systems ltd has sucessfully installed complete
solar sytems to over 200 Health facilities, schools , police stations, distict and
divisional headquarthers in Arid and semi Arid(ASAL) Regions of Kenya. We have
also successfully installed and commissioned over 20 solar and solar/wind hybrid
water pumps. These areas include, Malindi Island, Lamu Island , Pate Island ,
Manda Island , Voi , Garissa , Tana river , Lagdera , Kitui , Mwingi , Baringo , West
Pokot , Lokichar , and Somali , South Sudan and Rwanda in Eastern Africa. Our
South Sudan office, in Hai malakal has been a logistical focal point for our operations
in Sudan.Through it we have been able to install solar and power back up systems to
numerous Ngo's , Private institution and The South Sudan government. These
include Meda air , Norwegian peoples aid , World vision , UNDP , Sudan radio, BBC
Radio , Concern world wide , MSF Spain, Ministy of Agriculture , etc...
We undertake the complete design , supply and installation of solar and wind system
after a comprehensive asessment of energy requirements of institutions or
individuals. We have also installed thousands of power back up solutions for
institutions and private homes ranging from 700 watts to the Killo volts range. We
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have saved institutions millions of dollars in fuel costs in running generators by
inegrating solar and power back up systems by reducing their over reliance on
generators.
Why India is preferred to perform your foliage in the solar sectors?
India enjoys 250 to 300 light days a year and is, so, a potentially confidential location
for solar power plant projects. We have be award a transaction by Reliance Power to
locate up a 250 Mw project in Rajasthan.
I would like to show again that India is one of the biggest country in requisites of
solar (energy) that we find anywhere in the globe. The nationalized Solar Mission
(NSM) is in position and the department of new and renewable energy (MNRE) is in
the center of operational out extra plans. Besides, there are several states, including
Rajasthan and Gujarat, which have announced plans to track solar power and there
is a strong pipeline of projects.
Authoritarian and market certainties are important for sky-scraping investment
projects similar to solar. We notice physically powerful assurance by the government
and it truly is important for investors to reside betrothed in the lengthy period. On the
other hand, changeling in policy guide to worries in still source of project finance.
The feed-in excise is a big optimistic in the NSM but throughout the overturn request
process, the superiority and sustainability of the project should not be compromise
by request at an romantically lesser cost.
129
INDIAN SOLAR INDUSTRY
In recent years, Demand for solar products in India is rising, especially in rural areas,
and is being expected to continue to grow substantially day by day. In India, Most
famous applications are Solar cookers, solar pumps, Solar street lighting systems,
home lighting systems, power plants and solar water heating systems.
Solar based applications have been started promoting by many states by giving
various tax savings and incentives. For boosting the Solar Industry States like
Gujarat and Rajasthan have formulated progressive and transparent regulatory
framework. In addition, states like Delhi, Maharashtra, Uttar Pradesh, Chandigarh
and West Bengal have been promoting solar energy in semi urban, rural and urban
areas. In India, average electricity utilization after all the efforts is still the lowest in
the world at just 631 kWh per person and per year, but it is being expected to grow
to 1000 kWh within 5 years.
Indian Solar Industry has enormous prospective for a hot country as India where
approximately 45 per cent of households, generally rural ones, are not having
availability of electricity, as per the Indian Solar Energy Market Outlook 2012. The
solar sector is witnessing quick growth over the past few years and is being
expected to grow more in future. To become one of the most rapidly emerging solar
energy markets in the world, India‘s large population, geographical location and
government support has been helping it.
For local and global players, India has been becoming a favorite investment
destination.GDP of Indian economy is the 2nd fastest rate of increasing in the world
i.e. 7.3%. Without access to electricity, one thirds of the world's population of the
country accounts for in India. Despite several initiatives and policies, the situation is
arising to support poor households. The Indian energy sector is being handled by 5
different ministries from the Ministry of New and Renewable Energy. In the world,
India is perhaps the only country with the most dedicated ministry of renewable.
Regarding total energy consumption, India ranks 6th. And to meet its growth
aspirations, it is needed to boost up development of the energy sector.
130
CONTRIBUTION TO THE ECONOMY
For households and business, total planned and unplanned Solar Power outages of
4 - 10 hours in a day are common. In that, 40 per cent of electricity is stolen in India.
Not paid for so that the cost of electricity to pay the consumers is being increased.
In India, the Solar Energy sector is growing
rapidly. In the past few years, majorly
initiatives of Governments like subsidies
and tax exemptions. Solar Power is
considered as the best suited energy
source for India to minimize the operating
cost. Today, the installed capacity of solar
power is of 9.85 MW which is less than
0.1%. Current total installed renewable
energy is 13,242.41 MW as per MNRE.
Industry size
Capacity of 144912 MW is installed Over 5,000 trillion kilowatts
of solar energy in a year. In India, the average intensity of solar
radiation received is 200 MW/km square.
Geography vise
distribution
West Bengal, Maharashtra and Chandigarh, Gujarat, Rajasthan,
Delhi, Uttar Pradesh.
Per annum output Total installed renewable energy in India currently stands at
13,242.41 MW as per MNRE.
Participation in world
market
Of the world‘s commercial energy making, India Consumes
3.7% It has the 5th largest consumer of energy globally.
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SOLAR POWER GENERATION
Solar panel uses the energy of the sun as a renewable resource, for generating
electricity. By generating their own clean solar power energy, homeowners offset
electricity that would otherwise have been generated using traditional means. This
allows homeowners who have a solar panel installation for making a positive impact
on the environment everyday; if the sun comes up, carbon dioxide is being offset.
Initiatives of Government to Develop the Solar Energy Sector:
There are 3 government bodies which are established for promoting solar energy
in India.
1. The Ministry of New and Renewable Energy (MNRE)
2. Indian Renewable Energy Development Agency (IREDA)
3. Solar Energy Centre (SEC)
Factors that Drive the Growth of Indian Solar Energy:
The factors which propel the future and current growth in the solar energy sector
are divided into supply side growth drivers and demand side growth drivers.
Growth Factors (Demand Side):
India is suffering persistent energy shortage with an average demand and supply
gap rotating around 13 per cent of total power supply. This, attached with rising
energy needs, to drive the growth of the segment is a major factor. Electricity
consumption is forecasted by the power Ministry to increase 1900 kWh by 2032
from the current 660 kWh.
Growth Factors (Supply Side):
The current power generation in India is greatly dependent on non-renewable
natural resources like coal and diesel, whose fast reduction has been forcing the
government and the power generation companies for looking into Renewable
Energy sources, especially solar power. With the help of subsidy schemes and
policies, the favorable environment has been created by government that is
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encouraging power generation companies to invest in the sector and thus
promoting growth. Vast demand for electricity in rural areas is the other major
factor which drive the growth from the supply side lacking grid connectivity, and
plentiful availability of sunrays in India in a year.
Solar Energy: Drivers of demand and supply and major challenges
Indian Solar Energy Sector faced various challenges:
Indian solar industry is still in its promising stage and is facing many challenges. A
high cost of generating solar power is the main challenge. Solar projects need
huge amount of capital, and the inefficient financing infrastructure for these
projects is also major factor impeding growth in the sector.
Currently Research and Development in the sector is on a slow track because of
lack of joint and goal driven efforts on the front. Technological inventions improve
the efficiency of current solar energy systems. That is essential to develop the
solar energy probable in India. For this purpose, government has to develop
comprehensive R&D schemes and provide incentives with the current subsidy
schemes. Another important factor that ceases the growth of this sector is the poor
quality of standards, and that leads to destruction of the market between suppliers
and producers. System standardization will guide to validation of cost as
companies can invest in Research and newer technologies to meet common
condition.
133
Implementation of On-Grid Application:
As of technology invention, solar power generation works with the efficiency of 15
to 20 %. At this stage, on-grid applications on large scale are more feasible in
areas where there is ample of barren land and high rate of irradiance like Gujarat
and Rajasthan. It is very significant to give attention to the efforts in these areas to
recognize solar potential there .Before moving to another parts where the low
irradiance or there is shortage of barren land.
Energy Efficiency and Conservation
Review of annual per capita total energy consumption and electric consumption
indicates that an increased investment in energy efficiency and conservation can
lead to significant energy consumption reductions. Connecticut should be able to
reduce its per capita energy consumption to that achieved by New York and
California (e.g., 10% total energy consumption and 20% electrical consumption), with
a goal of having per capita energy consumption similar to that of the United
Kingdom, France, and Germany (e.g., 30% reduction). These conclusions are
supported by an independent assessment of Connecticut‘s conservation and
efficiency potential that was prepared for the ECMB by GDS Associates in June,
2004. This study found that Connecticut has a maximum achievable cost-effective
potential for energy efficiency of 12% by 2012 at a cost of less than $0.05/kWh
based on 2003 energy consumption. It was estimated that the annual investment
required to achieve these savings is between $82 million and $148 million, with an
estimated net present savings of $1.78 billion.
Many of the energy efficiency measures suggested by the Study Committee have
very short payback periods of less than five years, and are sound investments that
will have the added benefit of strengthening Connecticut‘s economy. These
initiatives are
Programs such as ―Distributed Generation$‖ sponsored by DPUC and the
Connecticut Department of Environmental Protection (DEP) should be expanded to
134
include electric and heating load assessments for businesses that have potential
CHP applications.
• Green Building Initiative: Adopt a program similar to California‘s Green Building
Initiative with a goal of reducing energy in privately owned commercial buildings by
20% over the next 15 years, using 2006 as the benchmark.
• Energy Use Reduction Incentive Program: Adopt an incentive program to
encourage residents to take the initiative to reduce their own energy consumption. A
model for this program is California‘s 20/20 program, through which residents
receive an additional 20% reduction in their electric bills if they reduce their summer
electrical consumption by more than 20%.
The Study Committee also supports investment in energy efficiency and
conservation measures that have a longer time frame. They are
• Education Effort Expansion: Include ―Energy Transfer and Transformation‖ and
―Science and Technology in Society‖ themes in the Connecticut Core Science
Curriculum and add a course to the curriculum at the high school level that is
devoted to the thermodynamics of energy, energy conversion and energy
economics.
135
GUJARAT SOLAR INDUSTRY
Declining any extension of deadline for developers, DJ Pandian, energy secretary,
Government of Gujarat said that only 300 Mw of solar power projects may
commission before the year ends.
Pandian informed that not all the companies that have signed the power purchase
agreements (PPA) are likely to meet the set deadline of the December 31, 2011 to
commission their projects.
The Government of Gujarat said that only 300 Mw of solar power projects may
commission before the year ends.
Govt. of Gujarat informed that not all the corporations that have signed the power
purchase contracts are likely to meet the set due date of the December 31, 2011 to
commission their projects.
"Currently, about 200 Mw of solar volumes are under execution at the solar park
near Patan, of which about 150 Mw will be commissioned by December-end. Extra
200 Mw of capacities to come up in other parts of the state by the due date ends. So
by The month of January 2012, we will be able to have more than 300 Mw of
volumes in solar power," he said. However, he denied any probability of an
extendable in the deadline set for the developers to commission the power projects.
Some of the developers have even filed petitions with the state energy regulator,
Gujarat Electricity Regulatory Commission asking extension of the due date.
According to industry players about eight companies including Moserbaer, Kiran
Energy have approached the regulator so far.
New ultra mega high-voltage transformer plant, to be set up in Vadodra, Gujarat by
TWBB of China and Atlanta transformers Gujarat
"Gujarat government is focusing on the renewable energy sources like solar, wind
and tidal power. Looking at the demand for the infrastructure of power transmission,
136
the new ultra mega high-voltage transformer plant will be instrumental in providing
resources for power transmission," said Li of TWBB.
Ex-Im Bank in MiaSolé‘s 2-MW solar project in Gujarat
Thin-film solar company MiaSol'e and the Export-Import Bank of the United States
are financing a 2-megawatt solar project by Universal Solar System in Gujarat, India.
The amount is unspecified.
The bank offers insurance against foreign default and guarantees credit extended by
foreign banks. The projects take advantage of opportunities presented by India's
aggressive solar push as outlined in their National Solar Mission which targets
20,000 MW of grid connected solar capacity by 2022. MiaSol'e is based in Santa
Clara, California.
The bank previously announced total financing for Indian solar projects in 2011 as
standing at $176.4 million. This includes an $18.9 million direct loan for a 5-MW
crystalline silicon-based system also in Gujarat that is to be constructed by American
Capital Energy with solar panels from SolarWorld California. – Katrice R. Jalbuena
Gujarat Gov‘s progressive approach for Solar / renewable energy: D J Pandian
· Government promoting solar energy generation by purchasing power at higher cost
· Increase in generation will lead to reduction in cost; purchase price will come down
in new agreements
· Pilot project for solar energy generation on roofs will be launched in Gandhinagar
―In solar power generation, Gujarat already has installed capacity of 150 MW and
this figure is expected to go up to 300 MW by January, 2012, 500 MW by August,
137
2012 and 700 MW by September, 2012. Gujarat Government has already entered
into power purchase agreement for 900 MW of solar energy,‖ Shri Pandian added.
CONCLUSION
This industry has various challenges that include, low cost of production,
increased Research & Development, awareness of consumers and financing of
infrastructure. India needs to build trade relation with Kenya for developing it‘s
Solar Industry. For fast growth and mass acceptance of the technology, it is
significant to overcome these challenges. Various instant actions to facilitate
growth are efficient implementation of renewable energy certificates, usage of
carbon trading as a resource of revenue, instant implementation of grid powered
energy in regions of Gujarat, development of off-grid usage in various applications
like cellular towers and encouraging localized mini grids in areas that lack
connectivity today. It is only a matter before India to become one of the world
leaders in Solar Energy, if these initiative work as planned.
Thus, Gujarat can satisfy its requirement of Solar Energy by extending its trade
relation with Go Solar Systems Ltd., Kenya.
138
SUMMARY OF GLOBAL/COUNTRY STUDY AND REPORT ON
BAMBURI CEMENT LIMITED
Bamburi Cement Limited operates in East Africa mainly Kenya & Uganda and the
company is manage as one enterprise. Our principal activities are in the manufacture
and sale of cement & cement related products. We also own and manage a world
class nature and environmental park developed from rehabilitated quarries.
Leader within creating components, Lafarge components sources through the
primary from the planet to create components for growing the entire world. Found in
seventy six nations, the actual Team reacts towards the tour's with regard to real
estate as well as facilities.
Bamburi Cement Restricted is actually consequently powered through the
requirements of clients, investors, nearby interests as well as designers. All of us
produce professional options that convince creativeness simultaneously because
leaving behind the lighter in weight track within the globe. We have been additionally
devoted to becoming the key marketplace as well as consumer focused Concrete
Organization} throughout Far eastern The african continent, having a powerful as
well as crystal clear commitment to the interests.
Functions system aspects within the creating business, through little contractors in
order to big building businesses, designers and native artisians. Whether or not
providing excellent concrete to some craftsmen or even assisting top designers
discover as well as provide innovative opportunities, It really is devoted to offering
options which suit the requirements of most the customers.
139
It's 1st plant Mombasa started production in 1954 with annual capacity of 1lakh 40
thousand tonnes of cement. Today the Mombasa based plant has the capacity to
produce of 1.1 million tonnes.
More than a decade ago, home mil charge (p. a) clinker milling flower had been
additional simply outdoors Nairobi, growing the entire creation ability to second . one
mil loads. Using the brand new flower, Bamburi Concrete Restricted continues to be
in a position to recovering along with it can in order to Nairobi as well as upcountry
marketplaces, via faster and much more effective packaging change period, The
actual track slipping in the Nairobi flower has additionally caused product sales in
order to Traditional western Kenya as well as Uganda.
It does not take biggest concrete production organization} in the area and it is
Mombasa flower may be the second biggest concrete flower within sub-Saharan The
african continent. Additionally it is among the biggest production foreign trade
earners within Kenya, transferring 28% of creation more than a decade ago (29%).
Foreign trade marketplaces consist of Re-union, Uganda as well as Mayotle. During
the past, they have got included as well Mauritius, Sri Kemzryn?, The actual
Comoros, Madagascar, Seychelles and also the Congo.
140
Comparative Ratios for Regional Cement Players
Comparative Ratios of African players
141
Manufacturing process
142
SWOT Analysis of Bamburi Cement
STRENGTHS
Low transport costs as plants are located near large markets
Strong cash flow and balance sheet
Lucrative export market Potential
Strong double digit growth in regional volumes.
WEAKNESSES
High energy costs
Local currency weakness
High shilling inflation
OPPORTUNITIES
Growing per capita consumption
Energy cost rationalization by the intro of petcoke to replace coal (25%
substitution) 250MW bujagali hydro power plant (2011)
THREATS
Inconsistent energy supply and rising energy price
Increasing competition
Drought and its negative impact on GDP.
143
KENYA’s EXIM POLICY
It is often mentioned that even though the actual reforms Kenya is actually done,
possess led to a particular macroeconomic balance (decline within price associated
with monetary inflation as well as reduction in financial deficit), actual GROSS
DOMESTIC PRODUCT development continues to be slower as well as joblessness
continues to be higher. The value of overseas industry with regard to Kenya has
grown however the industry stability offers damaged.
Kenya imports primarily equipment, transportation gear as well as essential oil
services europe continues to be Kenya's biggest investing companion, each like a
supply of imports along with a place to go for export products.
Kenya offers taken apart the quantitative limitations as well as removed the cost
handles. Additionally , Kenya is actually amending a few bits of the laws, such as
upon anti-dumping, countervailing as well as intelligent house to create all of them in
to conformity using the WTO Contracts. Kenya right now depends on the actual
contract price becasue it is primary industry plan device. The actual statement
information that even though Kenya has rationalized the contract price framework,
the actual transformation of most responsibilities -- for example combined or even
particular responsibilities -- in to advertisement valorem prices might boost the
openness associated with Kenya's contract price routine. In the same manner,
restricted alternative in order to "suspended" responsibilities might decrease space
with regard to management discretionary choices.
Significantly, aside from wood as well as seafood, Kenya does not have any
alternative in order to foreign trade responsibilities and it has in no way used backup
industry treatments. The actual statement additionally information nevertheless
which Kenya utilizes a number of motivation plans to advertise the export products.
Simultaneously, the actual part from the Condition within the Kenyan economic
climate continues to be essential, because privatization offers superior in a slower
speed.
144
Farming makes up about a few 27% associated with actual GROSS DOMESTIC
PRODUCT as well as about 60 per cent of getting through complete products, the
actual statement states. Main farming export products tend to be: green tea,
espresso as well as horticultural items. Kenya's farming plan should make sure
meals protection, described to incorporate self-sufficiency within primary food
products. Therefore, Federal government treatment within the field continues as well
as reforms are occasionally changed. The actual statement information that this
Kenyan economic climate happens to be arranged about farming as well as cordons
among farming along with other areas are essential. For example, agro-processing
industrial sectors make up the main subset of production.
Production makes up about regarding 13% associated with Kenya's GROSS
DOMESTIC PRODUCT. This says which Kenya's production field continues to be
slow recently as well as liberalization reforms possess exposed the lower
competition. The actual currently higher safety from the field failed to avoid the
failure associated with a number of companies, especially within the fabrics as well
as clothes business.
The assistance field may be the main forex one earning the money to represent
about 54% associated with GROSS DOMESTIC PRODUCT, the actual statement
information. It really is completely outclassed through tourist, as well as monetary as
well as conversation solutions. Still the fairly high-cost framework seems to possess
enforced the restriction within the improvement some other areas from the economic
climate which are extremely determined by fundamental solutions. Condition
treatment continues to be found in the majority of subsectors, such as within the
monetary subsector wherever government-owned banking institutions contain the
main discuss associated with build up as well as financial loans. The actual
statement provides which Kenya offers probably the most created financial
techniques in the area as well as, because of its location, they have the actual to
supply ocean going solutions in order to the land-locked nearby neighbours.
145
INDIA’s EXIM POLICY
Highlights of the Annual Supplement 2010-11 to the Foreign Trade
Policy 2009-14
Additional advantage of 2% reward, more than the present advantages of five
per cent or 2% below Concentrate Item System, brought about regarding one
hundred thirty five current items. 256 new releases additional below FRAMES
PER SECOND (at eight number level), that will be titled with regard to
advantages snabel-a 2% associated with BALLOON associated with export
products to any or all marketplaces.
Tea as well as CSNL Cardinol integrated with regard to advantages below
VKGUY snabel-a five per cent associated with BALLOON associated with
export products. Absolutely no responsibility EPCG system, released that
kicks off in august this year as well as legitimate for jus 2 yrs upto thirty-one.
three. year 2011, continues to be prolonged through another yr until thirty-
one. three. this.
Duty Entitlement Passbook (DEPB) scheme has been extended beyond
31.12.2010 till 30.06.2011.
Concessional Foreign trade Credit score: Attention subvention associated
with 2% with regard to pre-shipment credit score with regard to foreign trade
areas specifically, Handloom, Handmade items, Carpeting as well as SMEs
for many foreign trade areas.
Exporters will will have the flexibleness to obtain a top quality EPCG
authorization through submitting their own EPCG software upon Yearly
foundation.
Filtration within the accessibility to 4% UNFORTUNATE reimbursement
advantage. Service of the information preparing component with regard to
Enhance Consent as well as Foreign trade Marketing Funds Great (EPCG)
continues to be supplied with an off-line setting.
146
Finished Leather-based foreign trade will be titled with regard to
Responsibility Credit score Scrip snabel-a 2% below FRAMES PER
SECOND.
Responsibility totally free importance associated with specific accessories,
adornments and so on will be on Handloom made-ups export products
snabel-a five per cent associated with BALLOON associated with export
products.
Readymade Outfit field given improved assistance below MLFPS during a
period associated with additional six months
The actual govts. temporary goal associated with plan would be to police
arrest as well as invert the actual decreasing tendency associated with export
products and also to offer extra assistance particularly to people areas that
have been strike terribly through economic downturn within the created globe.
They wish to arranged an insurance policy goal associated with this type of
type in order to within achieving a foreign trade regarding 15% having an
yearly foreign trade focus on associated with US$ two hundred billion dollars
through Mar year 2011. Within the remaining 3 years of the Overseas Industry
Plan we. electronic. upto 2014, the nation is actually likely to return within the
higher foreign trade development route associated with about 25% each year.
By 2014, it really is once again anticipated which Indian will certainly dual the
export products of products as well as solutions. The long run plan goal for
your Federal government would be to dual India‘s discuss within worldwide
industry through 2020.
In in an attempt to fulfill these types of goals, the federal government would
venture with a mixture of plan steps which includes institutional modifications,
financial bonuses, step-by-step justification as well as improved marketplace
accessibility around the globe plus the diversity associated with foreign trade
marketplaces.
147
The next policy focuses on the improvement in infrastructure which is related
to exports that brings down transaction costs and provides full refund of all
kinds of indirect taxes and levies, which would be the three pillars. It will
support the country to achieve this target. Endeavour will be made to see that
the Goods and Services Tax rebates all indirect taxes and levies on exports.
The federal government offers endeavored in order to shift services
marketplaces via justification associated with motivation plans which also
contains the actual improvement associated with motivation prices that have
been in line with the recognized long-term competing benefit of Indian within a
specific item team five as well as marketplace.
New growing marketplaces happen to be provided a unique concentrate to
allow competing export products. This could obviously become broker on
accessibility to sufficient exportable excess for a item.
Extra sources happen to be provided underneath the Marketplace
Advancement Support System as well as Marketplace Accessibility Effort
System. Motivation plans are now being rationalized to recognize top items
which may catalyze the next step associated with foreign trade development.
Included in the coubntry‘s plan associated with marketplace growth, the
federal government possess authorized an extensive Financial Relationship
Contract along with Southern Korea that will provide improved marketplace
entry to Indian native export products.
They have got additionally authorized the Industry within Products Contract
along with ASEAN that will are available in pressure through Jan 01, the year
2010, and can provide improved marketplace entry to a number of
components of Indian native export products.
These types of industry contracts have been in collection along with India‘s
Appear Eastern Policythe federal government has additionally came to the
conclusion the actual Mercosur Advantageous Industry Contract. Once again,
148
this will be the actual country‘s practice in order to expand the actual industry
wedding to main financial types on the planet.
The federal government looks for to advertise Brand name Indian via 6 or
even more ‗Made within India‘ displays to become arranged around the globe
each year. Within the period of worldwide competition, it has an essential
requirement for Indian native exporters in order to update their own
technologies and minimize their own expenses.
Appropriately, an essential part of the other Industry Plan would be to assist
exporters with regard to technical upgradation. Technical upgradation
associated with export products is actually wanted to six be performed
through marketing imports associated with funds products definitely areas
below EPCG in absolutely no % responsibility.
Underneath the existing Overseas Industry Plan, the federal government
identifies exporters depending on their own foreign trade overall performance
plus they are known as ‗status holders‘. With regard to technical upgradation
from the foreign trade field, these types of position cases is going to be
allowed in order to importance funds products responsibility totally free
(through Responsibility Credit score Scrips equal to 1% of the BALLOON
associated with export products in the last year), associated with specific item
organizations.
This can make them in order to update their own technologies and minimize
expense of creation. With regard to upgradation associated with foreign trade
field facilities, ‗Towns associated with Foreign trade Excellence‘ as well as
models situated in it will be provided extra concentrated assistance as well as
bonuses.
The actual plan is actually devoted to assistance the expansion associated
with task export products. If you are a00 dexterity panel has been set up
within the Division associated with Business in order to help the actual foreign
trade associated with produced products or task export products making
groupe within the credit line prolonged via EXIM Financial institution for brand
spanking new as well as growing marketplaces.
149
This panel might have rendering through the Ministry associated with Exterior
Matters, Division associated with Financial Matters, EXIM Financial institution
and also the Book Financial institution associated with Indian. We wish in
order to motivate creation as well as foreign trade associated with ‗green
products‘ via steps for example took production program with regard to eco-
friendly automobiles, absolutely no responsibility EPCG system as well as
bonuses with regard to export products.
To allow assistance in order to Indian native business as well as exporters,
particularly the MSMEs, within getting their own legal rights via industry
treatment musical instruments underneath the WTO platform, all of us
recommend to setup the Directorate associated with Industry Treatment
Steps.
SWOT Analysis on cement industry In India
Strengths
High selling prices and profitability levels due to supply shortage
Relatively low energy costs
Tax- free environment
Taxes and restrictions set on imported cement
Natural hedge from out sides competition arising from high transportation
costs
Capital- intensive industry with long consrruction periods, creating natural
barrier to new entrants.
Weaknesses
High oil prices, significantly increasing production and transportation costs.
Proximity to lower cost export markets in Indian subcontinent, Egypt and
Turkey, increasing competitions in both local and export markets.
Fragmented regional industry with no exonomies of scale.
Non- optimal capital structure drives by the relatively low debt levels
maintained by most companies in the region.
150
Opportunities
Construction boom in all GCC countries that is expected to continue in the
short to medium term
Reconstruction in Iraq opens a window for dumping possible future excess
capacities.
A number of M&A transactions might take place in the near future .
Possible entry of multinational companies, increasing efficiency and opening
new export routes.
Threats
Several capacity upgrades are planned, raising the possibility of oversupply
sityation.
Increased competitions in local markets post joining WTO and /or opening up
for foreign investments.
Further hikes in oil prices could negatively affects companies profitability if
they cannot pass increase in production costs onto customers.
PRESENT MARKET SCENARIO OF INDIAN CEMENT INDUSTY
The Indian cement industry is the 2nd largest producer of excellence cement.
Indian Cement Industry is engaged in the manufacture of a number of varieties of
cement such as Ordinary Portland Cement (OPC), Portland Pozzolana Cement
(PPC), Portland Blast Furnace Slag Cement (PBFS), Oil Well Cement, Rapid
Hardening Portland Cement, Sulphate Resisting Portland Cement, White Cement,
etc. They are produced strictly as per the Bureau of Indian Standards (BIS) condition
and their quality is equal with the best in the world.
This contains 150 big and much more compared to 365 small concrete vegetation.
The actual industry's capability at the start of the entire year 2009-10 had been 217.
eighty mil loads. Throughout 2008-09, complete concrete usage within Indian was in
a hundred and seventy-eight mil loads whilst export products associated with
151
concrete as well as clinker amounted to three mil loads. The takes up an essential
put in place the actual nationwide economic climate due to its powerful cordons
some other areas for example building, transport, fossil fuel as well as energy.
During the last couple of years, the actual Indian native concrete business observed
powerful development, along with need protection the exponentially boosted yearly
development price (CAGR) associated with nine. 3% as well as capability inclusion
the CAGR associated with five. 6% among 2004-05 as well as 2008-09. The primary
aspects compelling this particular development sought after are the real-estate
growth throughout 2004-08, improved purchases of facilities through both personal
field as well as Federal government, as well as greater Government investing below
numerous interpersonal developers. Along with need development becoming
buoyant as well as capability inclusion restricted, the published capability usage
amounts of about 93% over the last five many years. Enhanced costs within chance
along with amount development resulted in the actual household concrete business
revealing strong development within proceeds as well as large quantity throughout
the time period 2005-09.
Total Export and Import between India and Kenya
S.No
. \Year 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011
1 EXPORT 595,254.94 635,609.27 614,088.18 689,241.82 1,042,646.86
2 %Growth 6.78 -3.39 12.24 51.27
3 India's
Total
Export
57,177,928.5
2
65,586,352.1
8
84,075,505.8
7
84,553,364.3
8
114,264,897.
18
4 %Growth 14.71 28.19 0.57 35.14
5 %Share 1.04 0.97 0.73 0.82 0.91
6 IMPORT 25,556.87 34,829.71 37,619.20 37,621.61 56,611.42
7 %Growth 36.28 8.01 0.01 50.48
8 India's
Total
Import
84,050,631.3
3
101,231,169.
93
137,443,555.
45
136,373,554.
76
168,346,695.
57
9 %Growth 20.44 35.77 -0.78 23.45
152
10 %Share 0.03 0.03 0.03 0.03 0.03
11 TOTAL
TRADE
620,811.81 670,438.98 651,707.37 726,863.42 1,099,258.28
12 %Growth 7.99 -2.79 11.53 51.23
13 India's
Total
Trade
141,228,559.
85
166,817,522.
10
221,519,061.
32
220,926,919.
14
282,611,592.
75
14 %Growth 18.12 32.79 -0.27 27.92
15 %Share 0.44 0.4 0.29 0.33 0.39
16 TRADE
BALANC
E
569,698.06 600,779.55 576,468.98 651,620.21 986,035.45
17 India's
Trade
Balance
-
26,872,702.8
1
-
35,644,817.7
5
-
53,368,049.5
8
-
51,820,190.3
8
-
54,081,798.3
9
CEMENT INDUSTRY IN GUJARAT
Ambuja Cement Ltd. is a cement business amongst conglomerates and mega
corps mainly in Gujarat that tower the International business scenario all over the
world.
Ambuja Cement Ltd. is one of the largest cement producers and sellers in
Gujarat and in India today..
Ambuja Cement Ltd. is making leading strides in cement exports and ships in
bulk and retail consumer packing to countries all over the world.
Group‘s outstanding performance is credited to excellence in management
and a spirit that results into a quantum jump in annual growth in face of stifling
competition and cut throat scenario that dominates the cement industry today.
.
153
TRADE BARRIERS IN KENYA
Kenya is a Member of the World Trade Organization (WTO), the Free Trade Area of
the Common Market for Eastern and Southern Africa (COMESA), the East African
Community (EAC), and the EAC Customs Union. High import duties and Kenya‘s
value added tax (VAT) pose trade barriers, especially in the agricultural sector.
Kenya‘s import regulations on agricultural products are sometimes altered to reflect
fluctuations in domestic supply and demand as well as political factors. Kenya has
bound only 14.6 percent of its tariff lines under WTO rules.
INVESTMENT BARRIERS
Kenya‘s judicial system has strived to improve its efficiency and timeliness, it is still
burdened by a huge and growing backlog of cases, including some that are
investment-related. Perceived corruption and inefficiency further reduce the
154
credibility of the judicial system in Kenya. Companies cite these deficiencies as an
obstacle to investment, especially since these problems make financial
institutionsreluctant to make loans and increase the risk premium.
Corruption
International Finance Corporation‘s Investment Climate Assessment for Kenya,
corruption was rated as a severe or major obstacle by three-quarters of firms
surveyed, with two-thirds of respondents stating they were expected to pay bribes for
government contracts.
TRADE BARRIERS IN INDIA
Import quota: Import trade quota is a trade barrier that sets the maximum quantity
(quantitative restriction) or value of a commodity allowed to enter a country during a
specified time period. It was observed during the course of the study that certain
countries like Vietnam impose a quota on the imports of some products like auto
components. Exporters find it difficult to plan production till they get their quotas
.
Licensing: Licensing is a means to control imports, depending on compliance with
specific criteria, used by various countries to safeguard their domestic industry.
These schemes can be applied for a variety of purposes, according to both
economic and noneconomic regulatory goals. Although products like
pharmaceuticals and pesticides are subjected to mandatory licensing in all countries,
Myanmar demands licensing of tyres as well. In order to export tyres to Myanmar the
exporter needs to get registered with the Directorate of Trade. This registration
allows the exporters to export their products freely to Myanmar. Similarly, the exports
of isolators and valves are subject to licensing in Vietnam. This is undertaken as
importers are allowed to import materials, equipment and machinery for the purpose
of establishing their own production lines and producing goods in accordance with
their investment licenses. The importers are not allowed to import goods for trading
purposes.
155
Prohibition: We could also find some cases where prohibition is a major non tariff
measures taken by the domestic government to safeguard imports. Prohibition can
be selective with respect to commodities and countries of origin/ destination, it
includes embargoes and may carry legal sanctions. Prohibition is sometimes in the
form of intrinsic specification of the products. We have discussed in detail about this
in the next section. 40 In the course of the study we came across certain products
which are subjected to import ban in certain countries. Import of Indian livestock /
meat is subjected to ban in Singapore and Indonesia. Indian meat is prohibited in the
above mentioned countries on account of being infected with foot and mouth
disease. Also, the Indian slaughter houses are considered to be unhygienic and ill-
maintained which further aggravates the agony that Indian exporters are currently
facing.
Discriminatory Bilateral Agreement are preferential trading arrangements that
may be selective by commodity and country and includes preferential sourcing
arrangements. In the course of the survy it was found that exporters exporting
autocompnents to Vietnam faced difficulties in customs valuation. Vietnam customs
do not apply transaction value to imports form India. The exporters pointed out that
Vietnam is obliged to apply transaction value for imports from the U.S. and no
administrative fees is charged by customs authorities in connection with importing or
exporting exceeding the actual cost of service provided. Vietnam has also committed
to apply the transaction value to imports from ASEAN countries. Such Agreements
place Indian exporters at a disadvantage.
Customs Classification Procedures: Countries are required to use internationally
harmonized methods of classification rather than national methods of custom
classification. Very often classification of items is done indiscriminately posing as a
nontariff barrier. Countries mis-classify items which leads to higher duty levies. In
case of jute products it was seen that special duty was being levied depending upon
the type of product mentioned on the consignment. On the export of ―Jute Bags‖ to
Malaysia a duty of 10% was levied however on the export of ―Jute Shopping Bag‖ a
duty of 25% was being levied. Both the products are exactly the same and do not
differ from each other in any aspect. Exporters often have to pay bribes in order to
get the item classified in a manner that it would attract lower customs duties.
156
BUSINESS OPPORTUNITIES BETWEEN INDIA AND KENYA IN FUTURE
Africa is seen as having potentially huge trade and investment market for the
future. The key to unlock this huge market could be provided by Kenya.
Investment of India in Kenya has been substantially rising. There is also
growing trend of Kenya investments in India. India‘s involvement with Africa is
focused on helping African countries develop their own potential for human
resource development.
India exports mineral fuels, automobiles, iron & steel, machinery and
instruments, organic and inorganic chemicals, drugs and pharmaceuticals,
cotton yarn and fabrics and rice and other cereals to Kenya and on the other
hand imports gold, aluminum, phosphoric acid, coal, pulp and waste paper,
precious stones including diamonds, etc from Kenya.
Kenya is quite eager to increase trade and investments from India. The
bilateral trade has already reached a level of $10 billion at present and is
expected to achieve a new high of $15 billion by end of the current financial
year.
Apart from mining, manufacturing, engineering, agro-processing, tourism and
bio-technology are considered to be the key sectors where there is further
scope for both the countries to grow.
Innovative investors are taking full advantage to grow multinational mobile
communication brands such as Celtel in spite of less than 5 per cent of
Africa's population having access to the Internet.. Celtel was taken over by
Zain. Indian company Bharti Airtel subsequently bought the Africa operations
of Zain.
In some of the African countries the poor infrastructure has meant an
increasing preference for value-adding investments that would bring benefits
to the locals as opposed to extraction and export of raw material.
In India private sector giants such as Tata group, HCL and Bharti Airtel have
begun exploring opportunities in Africa. This proves proving the receptiveness
of Africa to foreign investors as the Indian government steps up trade
relations with Africa.
157
Vast opportunities for sourcing ferrous and non-ferrous metals i.e. nickel,
aluminum, copper, tin, zinc, silicon, magnesium, titanium and cobalt from
Kenya will be done through this.
CONCLUSION
Kenya is seen as having potentially huge trade and investment market for
the future.
Investment of India in Kenya has been substantially rising. There is also
growing trend of Kenya investments in India.
In the Indian economy the cement industry occupies a place of
considerable importance, producing a fourth of the world‘s annual cement
output among them some gardens and also producing high quality
cements.
Bamburi cement has an essential contribution in Kenya‘s economy.
Kenya is the only country growing Bamburi cement; hence it is an
important product for export of the country.
The production and prices of Kenya‘s Bamburi cement will have negative
effects due to probable climate change.
Cement industry is one of the biggest employers of people from the rural
provinces of country, providing both permanent and seasonal employment
opportunities in the industry.
Both India and Kenya are trying to overcome the trade barriers of their
respective countries in order to have a flexible trade between both the
countries.
Cement industry is well established in both the countries.
Both the countries are putting efforts for increasing the trade relations
between them.
India is also increasing its technical skills and man power to increase its
share in export of Cement.
