Create successful ePaper yourself
Turn your PDF publications into a flip-book with our unique Google optimized e-Paper software.
PROJECT FINANCE<br />
<strong>KCB</strong> Bank<br />
partnership<br />
with Crown<br />
Paints<br />
Crown Paints intends to get<br />
more funds from <strong>KCB</strong> Bank<br />
for future expansion at the<br />
factory.<br />
“Currently, we are holding<br />
no stocks. We produce and<br />
sell the all paint we make.<br />
We will need to build a<br />
showroom and hardware<br />
for storing the finished<br />
goods,” says Rao.<br />
The Kisumu factory has<br />
assisted in changing<br />
fortunes for the company.<br />
“In Rwanda, the business<br />
has grown by over 100<br />
per cent. In Tanzania, we<br />
have just broken even and<br />
despite some teething<br />
problems in Uganda, we<br />
are doing well,” Mr Rao<br />
says.<br />
For the past four decades,<br />
Crown Paints has<br />
maintained its reputation<br />
as a manufacturer of<br />
various paints and paint<br />
related products such<br />
as internal and external<br />
paints, specialized and<br />
textured paint finishes,<br />
roof paints, floor paints<br />
and wood varnishes.<br />
400m<br />
The amount it cost<br />
Crown Paints to set up<br />
the Kisumu plant.<br />
which the decision to open<br />
a factory was made, was a<br />
difficult and painful one for<br />
the Nairobi Stocks Exchange<br />
listed company.<br />
To start with, the company<br />
was just coming out of a costly<br />
expansion in the East African<br />
region that had consumed<br />
billions of shillings.<br />
Secondly, the company<br />
had suffered heavily from the<br />
exchange rate changes with<br />
the currencies in Tanzania,<br />
Uganda and Rwanda<br />
depreciating by about 50 per<br />
cent.<br />
The effect was a loss to the<br />
tune of Sh. 300million.<br />
To raise capital for the<br />
Kisumu plant, Crown Paints<br />
approached <strong>KCB</strong> Bank,<br />
through which the paint<br />
manufacturer conducts over<br />
80 per cent of its businesses.<br />
“We have benefited a lot<br />
from the bank. When we<br />
approached the bank to<br />
finance the Kisumu project,<br />
they gave us the best interest<br />
rates that were much more<br />
competitive,” Mr Rao says.<br />
Crown Paints has a<br />
partnership with <strong>KCB</strong><br />
Bank in which they benefit<br />
from special discounts and<br />
free advice from the paint<br />
manufacturer.<br />
“We offer free advice on<br />
special finishes, various<br />
decorations and paints to use<br />
to the bank’s customers who<br />
take loans to build property,”<br />
Mr Rao says.<br />
With <strong>KCB</strong> Bank financing,<br />
the company built the Sh.400<br />
million Kisumu plant. After a<br />
few months of operation, the<br />
Crown Paints Kisumu factory<br />
is already a success.<br />
The factory is completely<br />
automated and produces 1.2<br />
million litres of paint per<br />
month.<br />
During the production<br />
process, other than<br />
when loading the paint<br />
34 |
Change language