Kenya:Toyota targets more contracts after signing deal

Japanese conglomerate Toyota Tsusho Corporation is eyeing more big-ticket contracts in Kenya after signing a support deal with the government.

The Nagoya-based company, a unit of the Toyota Motor Corporation, says it is ready to undertake several projects in diverse sectors of the economy including mining and power generation.

This will significantly expand its business in Kenya from the mainstay motor dealership which it serves through several directly and indirectly-owned subsidiaries including Toyota Kenya and DT Dobie.

“Together with an executive committee of the Kenyan government, we are now working on the development of the nation’s electric power and energy, oil and mineral resources, environmental preservation, and agricultural industrialisation sectors in addition to our endeavours in the automotive business,” Toyota said in its latest annual report.

Details of the specific projects are expected to emerge in the coming months. Toyota has expressed interest in expanding and undertaking new power projects including the geothermal Olkaria series by state-owned KenGen.

The ongoing talks between Toyota and government bureaucrats are a product of a 2012 MoU signed by the multinational and officials of the Vision 2030 which is in charge of designing the country’s major development projects.

“That cooperation is unfolding in conjunction with Kenya’s Vision 2030 programme for raising incomes and standards of living,” Toyota says in the report.

“In addition to fostering skills and enterprise in Kenya’s automobile industry, we are participating in geothermal power development and in other undertakings for tapping the nation’s potential.”

The new projects will add to Toyota’s rising profile in public sector projects which has been dominated by Chinese companies in recent years.

Toyota and Hyundai Engineering last year completed the construction of KenGen’s Olkaria I and IV which have a combined output of 280 megawatts (MW). Turbines and generators for the plant were supplied by Toshiba Corporation.

It was Toyota’s first major deal outside the motor vehicle business in Kenya. Mitsui and Toyota in 2014 won a Sh2.5 billion contract to supply and install cranes at Mombasa’s new container terminal in a restrictive tender opened only to Japanese companies.

Toyota’s latest project is a Sh103 billion fertiliser factory that is being built in phases.

The multinational is also conducting a feasibility study for Kenya’s crude oil pipeline and has made a proposal to build a water desalination plant for Mombasa County.

Toyota’s expansion in Kenya has been aided by former Kenyan ambassador to Japan Dennis Awori who has emerged as an insider in corporate and government circles. Mr Awori is the chairman of Toyota Kenya and an advisor of the conglomerate’s African operations.

Credit: Business Daily