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It Runs in the Family TRENDS INTEL INDUSTRY REGION PURSUITS SUSTAINABLE BANKING STAWI PENSION EAST AFRICA TRAVEL GEMS NOT FOR SALE NOT Corporate Magazine | October2020 - January, 2021 A society in business It runs in Making Mulleys the Family Things cannot Secrets of building a great just fall family business into place Also in this issue, updates on the COVID 19 vaccine and how Biden will approach Africa The Ultimate Trade Finance Solutions 18 How Biden will approach Africa Biden has promised to “bring Our services include: to the presidency decades of • Pre-Shipment Finance/Pre-Export Finance foreign policy experience and a • LPO Financing/Supply Chain Financing demonstarted committment to Africa.” • Bills/Invoice Discounting Facilities • Stock Financing Facilities • Documentary Collections • Bank Guarantees/Bonds • Post-Import Finance 6 • Letters of Credit KCB bags major green finance deal CONTACT US TODAY: The bank is the first lender in Kenya and private sector entity Call: 0711 087 000 or 0732 187 000 to receive this accreditation Email: [email protected] cementing the sustainability Web: www.kcbgroup.com thought leadership efforts within the Group 44 Side-stepping the common pitfalls of family businesses The challenges of family businesses can be summed up to governance and succession 10 First annuity road paves way for more The road construction contract 12 was awarded to Intex Raf Construction Company at a cost Will Africa get the short end of the vaccine stick again? of KShs8 billion and financed by Kenya among countries in which trials are being KCB Group conducted in race to beat virus 50 There are KShs51 billion worth of unclaimed assets, and that’s a bad thing 2 | | 3 Regulated by the Central Bank of Kenya WORDFROM THEEDITOR OPINION Prevailing in Covid times Family-owned businesses key to post pandemic recovery eedless to say, the year was one of the most By Peter Kathanga eventful we have had in a long time; COVID-19 ensured that the business amily enterprises have shaped hopefully passed from one generation Novartis (Edouard Sandoz family) among N environment was severely disrupted. the business landscape for to the next. A look at the last century others However, we have proved that we are Gloablly, we have seen centuries and remain an demonstrates that family business has An interesting lesson from these resilient and, with a long term view, we will prevail. some businesses that F important pillar as a source strong ties that bind and are critical in leading family-owned businesses is that, The more reason why this issue puts a spot light on can trace their roots to of employment, wealth enabling them to withstand recession, although most of them have publicly family ran businesses, how they can navigate the tough hundreds of years ago. creation, and economic growth. pandemics, and even wars. This resilience listed, the family retains at least some times and how to transition management from one Many thriving local In Africa, the roots of most businesses is a hallmark of successful family owned considerable shareholding, seats on the generation to another. KCB Group Head of Corporate Affairs are families, which have within them the companies. board, and are not necessarily the CEOs. family businesses can Judith Sidi Odhiambo We have talked to a few businesses that have learn a thing or two on characteristics, habits and cultures that Their ability to survive and adapt Like every other business, family succeeded by adopting business models that have how to nurture their Acting Director Marketing and often determine their success. coupled with quick decision making, enterprises are being severely tested by ensured survival across the economic cycles. One in busineess for the long Communications Some of the best brands and leading strong values, and long-term goals the world economic crisis occasioned Wanyi Mwaura particular – Rwathia Distributors – has been distributing haul. businesses are family owned and are endear most budding entrepreneurs to by the outbreak of COVID-19. On the products for East African Breweries Limited for more Assistant Brand Manager Marketing and considered important and dynamic this model of business. one hand, this is seen as the final nail than half a century without interruption. Communications participants of the global economy. In And these firms are found in all sectors on the family business model; on the We have seen the downfall of well established family Linda Amboye Kenya, family run businesses play a major of the economy, from automotive to other hand, the continued existence of business empires orchestrated by internal wrangles and Editor and KCB Bank Corporate role in sectors such as manufacturing, retail and wholesale, asset management, these businesses over generations is a bad management practices. Communications Manager agriculture, and small scale trading. media, banking and capital market, testament to their strength and resilience. Globally, we have seen some businesses that can trace Peter Mwaura This oldest form of commerce nurtures telecommunication, consumer products, The pandemic is just another crisis in their roots to hundreds of years ago. Many thriving local Project Editor the entrepreneurial spirit that is then and oil and gas. the journey and multigeneration-family family businesses can learn a thing or two on how to Anne Mathenge Unfortunately, a family-owned business will be critical as the engine for nurture their businesses for the long haul. business as a model is facing an existential post-pandemic growth. KCB Group Corporate and Regulatory In the issue, we report on a major milestone that Affairs, Kencom House, Nairobi threat. A lot of family enterprises are The pandemic also presents an KCB Bank achieved: that of being the first bank in East Tel:0711087000 or characterized by an alarmingly low opportunity for the family business to and Central Africa to be accredited by the UN Green 0732187000 / 0711012199 survival rate. Studies show that less take stock of their business models, Climate Fund as the first financial institution for the www.kcbgroup.com than a third of family companies survive question their operational sustainability Facebook: KCB Group implementation of green financing in East Africa. Twitter: @KCBGroup the transition from the founder to the and resilience, and to formalize their We have covered the first road annuity programme Instagram: @KCBGroup second-owner management. Worse yet, is governance structures; to safeguard their in the country – financed by KCB Bank – and the transition survival rates from second businesses for today and the future. Give us your feedback at: which is a reflection of our resourcefulness and [email protected] to third-generation ownership. In this edition of the Venture, we cast market leadership. This is a novel way of financing Subsequent transition is nearly the spotlight on some of the best-run large infrastructure projects which has been very KCB Venture is published for KCB unheard of, except in select enterprises family-owned enterprises we could find. Group by Oxygène MCL successful in developed countries but which has yet [email protected] with strong foundations, structures, We examine the relationship between to take root on the continent. www.oxygene.co.ke and succession plans. Some of these family business founders and the survival With the departure of Donald Trump as the President global brands include Ford Motor of these businesses as they transit from of the United States of America, we analyse the impact KCB Venture is available online - Company (Henry Ford family), one generation to the next and the agile https://ke.kcbgroup.com/our-blog/ of President Joe Biden’s and his government’s policies on kcb-venture Walmart, Volkswagen (Piëch- business decisions they need to make the continent of Africa. Porsche family), Reliance Industry to help protect employees and keep the ©2021 No part of the contents may be (Ambani family), Tata (Jamshedji company afloat. reproduced without prior permission We hope you enjoy the read. from the publishers. All advertisements Tata family), Nike (Phil Knight and non-commissioned texts are family), Samsung electronics The writer is the Director, Corporate taken in good faith. While every care is (Lee Byung-chul family), and Banking at KCB Bank Kenya taken to ensure accuracy in preparing Editor-in-Chief the magazine, the publisher and KCB Venture assume no responsibility for effects arising therefrom. Unfortunately, a family-owned business as a model is facing an existential threat. A lot of family businesses are characterized by an alarming survival rate. Studies show that less than a third of family businesses survive the transition from the founder to the second-owner management. 4 | | 5 TRENDS&INTEL this accreditation, cementing the with the fiduciary standards of the sustainability efforts within the Group GCF, positioning the Group as a TRENDS&INTEL especially for portfolio re-imagining in thought leader in the wider climate the green lending space. action community and at the forefront “We are proud of the efforts and of environmental/green/climate investment we have put over the change initiatives and solutions. years to mainstream and entrench a Kenya, which is a signatory to sustainable business that has earned the UNFCCC, Kyoto Protocol, Paris us this recognition. It is a milestone agreement, SDGs and numerous for the Bank and the country as it global and regional frameworks opens up investment and development geared to climate action, has put a of the green economy through GCF’s lot of effort to operationalize various support,” says KCB Group Chief policies and laws. Executive Officer and Managing “The National Climate Change Director, Joshua Oigara. Response Strategy, and its associated The Bank has been accredited under National Climate Change Action the medium to large private sector Plan, lay the groundwork for Kenya’s category, and is therefore capable of Nationally Determined Contribution fronting projects of between USD 50 under the Paris Agreement, says CS million (KShs.5 billion) and USD 250 National Treasury Amb.
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