Friday, 8 February 2013

Nakumatt honeymoon over as Uchumi eyes Rwanda market

THE DOMINANCE of supermarket chain, Nakumatt, in the local retail business will soon end after Uchumi Supermarket announced it would set up shop in Rwanda.

Nakumatt launched its operations in Kigali in 2008. Since then, the Kenyan-based retail outlet has been dominating the market as local supermarkets like Simba and Ndoli present minimal competition.

Jonathan Ciano, the Uchumi chief executive officer, revealed the firm’s plans over the weekend in Nairobi. 

Uchumi, Kenya’s third-largest retail supermarket chain, is venturing into Rwanda following success in its subsidiaries in Uganda and Tanzania.

Its entrance into the local market means competition in the retail sector will be fierce.

However, Adan Ramata, the Nakumatt country manager, said his company was ready for any competitor when asked about his reaction to Uchumi’s entry into the Rwandan market.

“We are focusing on growing our business. For us, competition is the best game. Besides, their entry cannot affect us because it’s not going to be our first time to compete with them,” Ramata said.

“We have been with them in Kenya, Tanzania and Uganda and have beaten them in the game. So, we will give them a run for their money since we already have strong support in Rwanda.”

Uchumi, which is listed on the Nairobi Securities Exchange, is also planning to cross-list its shares on the Rwanda Stock Exchange.

“Setting up a branch in Rwanda is, however, not a requirement before the cross-listing,” Ciano is quoted saying in Kenyan press. 

Uchumi is currently going through the paperwork and seeking approval from the government.

Speaking to The New Times yesterday, Vivian Kayitesi, the Rwanda Development Board (RDB) head of the investment promotion and implementation unit, said plans by Uchumi to extend the retail chain in Rwanda were still at a conceptual stage.

“Our services department has been engaging them to set up shop in Kigali,” she stated.

“This will be another exciting opportunity for us to have one of the leading retail stores in the region invest in Rwanda. Also, we believe that Uchumi will be vital in growing and developing a modern, competitive, open and inclusive financial sector in Rwanda,” said Kayitesi.

Once Uchumi sets foot in Rwanda, it will become the second Kenyan retailer to set up shop in the country after Nakumatt, and also join a host of other Kenyan companies such as Kenya Commercial Bank and Equity Bank.

Uchumi’s appetite for expansion is motivated by the rising competition from its Kenyan peers in the local and regional markets like Nakumatt, Tuskys, Naivas, Ukwala, and Chandarana, which are also in aggressive expansion to widen customer outreach in East Africa.


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