Hopeful, cargo firms in Kenya invest in space

Saturday June 22 2013

Siginon Freight employees at the Jomo Kenyatta International Airport in Nairobi. Photo/Phoebe Okall

Siginon Freight employees at the Jomo Kenyatta International Airport in Nairobi. Photo/Phoebe Okall Nation Media Group

By SCOLA KAMAU Special Correspondent

Freighters and transporters operating in Kenya are investing in storage space on the back of an expected boom in exports and imports.

The growing construction sector as well as the discovery of oil and gas have triggered the importation of machinery, thereby creating more avenues for cargo handlers to grow their business.

“The cargo market is expected to grow in volume to above 5.5 million tonnes annually following increased demand for construction materials across the region and drilling of oil in Uganda and Kenya,” said Bernard Osero, a Kenya Ports Authority spokesperson.

Currently, cargo volumes stand at 1 million tonnes annually.

The fresh produce and flowers market is also expected to recover from the Euro crisis raising hopes of increased export volumes.

Also, Kenya’s peaceful elections in March helped to boost imports after months of a slowdown due to anxiety among importers.

“Importers were scared of building up stock. Most of them stopped orders and concentrated on clearing stocks,” SwissPort Cargo-Kenya commercial manager Jeroen de Clercq.

The company sees its capacity exceeding 85,000 tonnes this year, from 74,000 tonnes in 2012. SwissPort is also considering expanding its cargo business to Mombasa, whose port attracts a lot of regional import and export traffic.

Siginon Freight, a cargo logistics company is constructing a Ksh1 billion ($11 million) imports and exports facility at the Jomo Kenyatta International Airport.

The company plans to start operations in September. The 5,000 square-metre facility has a basement and refrigerated area for handling flowers and vegetables.

Through this facility, Siginon hopes to grow its perishables handling capacity from 10,000 tonnes to 60,000 tonnes per year.

“Flowers will be moved to the airport two hours earlier, which will help improve their shelf life,” said a project manager at Siginon Aviation Moses Wahome.

Kenya Airways, meanwhile, is set to acquire a cargo plane — a Boeing 767 — in September to boost capacity. Earlier this month, the carrier introduced a Boeing 737-300 cargo plane that was previously used as a passenger plane, and expects to convert three more by the end of the year.

“We are keen on growing our cargo business from the current eight per cent of total revenues to about 11 per cent this year,” said Peter Musola, KQ’s revenue manager in charge of the cargo division.

British Airways, which currently commands the largest share of Africa’s cargo market at 126 tonnes weekly, sees great potential in the sector.

“Demand remains higher than capacity, meaning there is great potential for cargo business,” said British Airways regional commercial manager George Mawadri.

Emirates, which has two cargo freighters flying through JKIA, said trade in and out of East Africa was booming and that the airline would consider increasing its frequencies depending on demand.

“East African economies are growing, giving us an opportunity to expand our cargo business, especially in horticulture and machinery,” said Khalid Bel Jaflah, Emirates vice president for East Africa.