Swedish bus and heavy trucks manufacturer Scania’s coming to Kenya is set to earn the son of one of the founders of collapsed public transport operator Akamba a big pay cheque.
Niaz Nathoo, the managing director of Kenya Grange Vehicle Industries which has been the exclusive franchise holder and reseller of Scania buses and trucks in Kenya, has sold part of his assets, giving the Swedish company exclusive control of the distributorship of its vehicles.
Scania said the acquisition of Mr Nathoo’s assets as well as new investment in the business cost a total of Sh2.58 billion, although senior vice president for sales and marketing Christopher Podgorski declined to disclose the amount paid to the Kenyan businessman.
“The (new) investment is a mixture of share and working capital, we are buying all assets including vehicles already in stock, those in the pipeline as well as repair kits and spare parts,” said Mr Podgorski.
“However, we have not bought Kenya Grange’s facilities in Mombasa and Nairobi but have instead leased them out on a 10-year contract,” he added.
Mr Nathoo, 72, is the son of HassanAli Nathoo, one of the founders of Akamba Roads Services. Kenya Grange Vehicle Industries has been operational for the past 27 years.
The Nairobi Industrial Area-based dealer will now be known as Scania East Africa Limited. However, Scania will still maintain Kenya Grange as its franchise dealer in Uganda and Rwanda, home to two Kenya Grange subsidiaries—both called Skenya Motors Limited.
The two subsidiaries were not part of the acquisition. The iconic Akamba bus service was founded before independence, primarily operating on the Machakos route before expanding to Mombasa, Isiolo, Taita Taveta and thereafter going regional. However, the transport provider has since gone into receivership.
In 1987, the Akamba family formed Kenya Grange Vehicle Industries as a subsidiary, one which has since borne two subsidiaries in Uganda and Rwanda.
Mr Nathoo, who was working and living in UK during Akamba’s peak years and formation of the subsidiary, came back to Kenya in 1995 with his wife, leaving behind his two sons.
The electrical engineer by profession then bought out Kenya Grange Vehicle from his siblings, taking over the Scania franchise that had been ongoing since 1988.
“My sons are comfortable working in the UK and I am getting a bit old,” said Mr Nathoo, a University of Wales graduate. “That is why I decided to sell part of the business to Scania so that they can continue the good work we started.”
Mr Per Holmstrom, the newly-appointed Scania East Africa managing director, said the company will absorb majority of Kenya Grange’s 160 workforce.
“By law, we have to declare all Kenya Grange Vehicle Industries employees redundant at the end of this month. However, we will hire about 90 per cent of them to work under the new company beginning March 1,” said Mr Holmstrom.
Scania’s move to set up an office in Kenya will pit it against General Motors East Africa. GM currently commands the biggest portion of the market through its flagship Isuzu trucks and buses. Other players who are set to get unsettled include CMC and DT Dobie.
Source: Business Daily