Friday, June 3, 2011

Trans-Century at Mind Speak

May’s edition of Mind Speak saw Transcentury parade itself in this monthly forum (which I regularly attend) organised by Aly-Khan Satchu a Financial Analyst who runs rich management

This was coming head over heals of April forum that had President of Uganda H.E. Yoweri Kaguta Museveni as the Guest speaker. What is fascinating about this company is that it is a company founded by 29 prominent personalities. These personalities have been accused of either being too close to the center of power or have used their positions to acquire contracts or use privy info BUT they have defended themselves as people who have acquired their wealth genuinely and in a range of counties in the region.

To pitch for this company Transcentury were; Dr. Gachao Kiuna (CEO) and Yida Kemoli (Head of Finance and Corporate Strategy).

Background of Transcentury
The CEO Dr. Gachao gave us a brief history of this company. It was started by 29 people (all men) who used to meet informally in what in Kenya we call ‘chama’. They all agreed to each contribute Kshs 1 million. So they expect to have an initial capital of Kshs 29 million however they ended raising Kshs 24 Million.

Their initial investment was in South African Breweries which had entered the Kenyan Market in 1998 only to close in 2002 after four-year beer war with Kenya Breweries and failing to secure a 10% of market share.
These investors managed to recoup their investment from SAB due to the fact that SAB pulled of the market by a negotiated settlement with Kenya Breweries Ltd (now East African Breweries Ltd, EABL).

Having learned from this experience the 29 vowed never to go for anything less than controlling stake in a company (51% of the share capital).

Present Day Transcentury
The 29 investors formed Transcentury which is a Holding company with interests in;

  • Power Infrastructure: Manufacture of Electrical Cables, Conductors, Transformers and Switchgear. 
  • Transport Infrastructure: Operation of the Kenya-Uganda Railway Concession.
  • Specialized Engineering: Distribution of Mission-Critical Industrial Equipment and Construction of Electrical Installations.  
The company has pan-African interest in outlook i.e. it wishes to invest in the whole of Africa and that is why as I came to find out it was at the event because it wants to list on the Nairobi Stock Exchange (NSE).

The company has 5 divisions i.e. Power Infrastructure, Transport Infrastructure, Specialized Engineering, Consumer and Affiliated Holdings.

The company has raised some eye brows with its Transport Infrastructure division with people questioning the way it got into the concession of Rift Valley Railways (RVR) and the two guest speakers had a hard time convincing us. However, they had their side of the story.
The company seems to hedging on the railway considering it is has entered into partnership with a Brazil Railway company America Latina Logistics (ALL).

The other eye brow is that the company can’t seem to send away the ghosts of the 29 investors who as some would put it could raise the issue of ‘conflict of interest’ given that some of them are CEO’s of some of the divisions the company engages. To this the CEO pointed out that some of their major customers are you and me (ordinary folk) and NOT government parastatals.

The other observable omission in the company which was observed by Gina Din was that the company’s 29 investors are all men!

Going Forward
In the infrastructure sector given that most of the infrastructure building is done by Chinese Companies funded by China gov’t which has shown that it is willing to fund states improve their infrastructure. Does Transcentury know anything that we don’t? (A query raised by one of the participants).

Only time will tell however, should you want to know more about this company the CEO Dr. Gachao Kiuna asked the participants to visit any Dyer & Blair.

Presentation at Mindspeak (Pdf)

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