By A CORRESPONDENT
South African tiles and bathware retailer Italtile Ltd will open two outlets in Kenya this year, the company has said in its half-year report.
According to the firm, an exploratory partnership with an unnamed Kenyan firm has established the country to be a potential growth market, making it the next target for Italtile’s expansion into the rest of Africa.
“In view of the positive trading opportunities in Kenya, new stores will be opened in Mombasa and Nairobi during the current calendar year,” says the report released in Johannesburg last week. “This investment will provide a strong platform for growth and ensure that the business operates in line with the group’s benchmarks,” it says. The entry of the South African firm into the Kenyan market is expected to intensify competition in the tiles and bathware sector, which so far has been dominated by half-a-dozen Kenyan firms with a product mix of locally made and imported products.
Major local players in the sector include Clayworks Ltd, Saj Ceramics Ltd and Tile and Carpet Ltd.
Italtile is the leading multi-faceted retailer of tiles and bathware in South Africa. Its best known brands are CTM and Italtile, which cater across the market spectrum from low-priced to premium accessories.
The company trades out of 66 CTM-branded stores in South Africa and a further 16 stores in Botswana, Lesotho, Malawi, Namibia, Swaziland, Tanzania, Uganda and Zambia. Italtile also operates in Australia, where it has eight stores in the states of Queensland and New South Wales.
According to the company’s results for the half-year to December 31, 2006, Italtile recorded an 11 per cent increase in turnover to $183 million. Trading profit rose by 21 per cent to $25.6 million.
The company attributed its improved performance to several factors such as the expansion of its product range to include such products as wooden laminated flooring and the expansion of the bathware product range beyond taps to include bathroom accessories.
The entry of the South African retailer comes at a time of renewed interest by investors in the building sector in the Kenyan market following a construction boom that has seen certain accessories and consumables, including cement, experience supply shortages.
The construction boom has been attributed to the country’s resurgent economy, which, according to Finance Minister Amos Kimunya, grew by a respectable 6 per cent in 2006.