2018 Kenya Family Business Survey - PwC
1 FamilyBusiness Survey2018 2018FamilyBusinessSurveyThevalueseffectHow to build a lasting competitiveadvantage through your values andpurpose in a digital age.
2 Kenya Family Business Survey 2018
3 Family Business Survey 2018IntroductionIn recognition of the exceptional value that family businesses and privatecompanies contribute to the economy in Kenya and the East Africa region, PwChas published our third biannual Family Business Survey, Kenya edition. Thisyear’s survey focuses on values and how clear, well-integrated values have thepower to transform family businesses.As PwC, we also have strong values and they inform our service to clients andoutreach to business leaders like you. Our global PwC values – Act with integrity,Make a difference, Care, Work together and Reimagine the possible – are howwe see ourselves and how we communicate a shared PwC culture.We are committed to working with our clients to develop solutions with provenresults and a strong track record of success. Our practitioners are trustedbusiness advisors who bring a wealth of experience to our clients, as well asrelatable experience and insight.This publication, based on conversations with family business owners, is aneffort to help you understand some of the trends affecting family businesses inKenya. Private companies represent a very broad market including establishedfamily businesses, family managed or controlled businesses and the influentialindividuals who lead them. On the horizon in Kenya, we are seeing intergenerational transfers of wealth, the prominence and growth of privatecompanies cross-border and increased regulatory pressure on companies of allkinds.In this publication, our practitioners, senior members of Kenya’s family businesscommunity and representatives of related industries share their insights,which I hope will resonate with you. The survey itself is the product of manyrespondents’ time and effort. We are grateful for their contributions.Our team is ready and prepared to help you achieve your business goals. If youhave any questions or if you need help in a particular area of your business,please reach out to any of the PwC people profiled in this report. You are alsowelcome to contact me or our Private Company Services partner leader, MichaelMugasa, at any time.Peter NgahuCountry and Regional SeniorPartner, Eastern Africapeter.ngahu@pwc.com 254 20 285 5000
4 Kenya Family Business Survey 2018
5 Family Business Survey 2018ForewordIn a fast-changing and challenging business environment, family businessowners are introspecting on their legacy, purpose and what makes “values”count for their businesses. Digital technology is disrupting businesses;sustainability is becoming key to the conduct of business; winning trust is moreimportant than it’s ever been; and millenials present an enduring demographicchange. In this third edition of the results of our biannual family business surveyin Kenya, we focus on the significance of “values and purpose” as a driver ofsuccess in family owned businesses.We believe family businesses - built around strong values and with anaspirational purpose - have a competitive advantage in disruptive times. It’slong been recognised that a family firm - ranging from a global enterpriseto a business in a small community - is more likely than other companies totreat each day’s activity as an investment in the long-term, prioritising broadstakeholder interests over the short-term earnings cycle.Overall, our respondents in Kenya expressed continued optimism about futuregrowth, but also increasing concern about corruption in the countries where theyoperate, attraction and retention of talent, prices of energy and raw materials,international competition, innovation to keep ahead and regulation. Thissuggests a need for continuous strategic thinking to stay ahead of the curve!For this report, we surveyed 2,953 companies in 53 countries globally, and 46respondents in Kenya, covering a wide range of sectors. I would like to thank therespondents in Kenya for taking the time to participate in the survey.We were also privileged to conduct in-depth interviews with Mr Adil Popat,Executive Chairman of the Simba Corporation; Dr Raju Mohindra, Founder andChairman of the Dawa Group; Mr George Odo, Senior Partner and ManagingDirector, AfricInvest, East Africa; and Mr Mihir Shah, Head of Strategy, Sales andMarketing at Bidco Africa. I sincerely thank them for being so generous with theirtime and insights.It is indeed an exciting time for family businesses in Kenya and globally. We arealways pleased to have a conversation with you on any family business relatedtopics, whether covered in this publication or not. Please contact me or anyof the PwC practitioners who have shared their views in this report for moreinformation.Michael MugasaPartner & Leader, Private Company ServicesPwC Kenyamichael.mugasa@pwc.com 254 20 285 5688
6 Kenya Family Business Survey 2018Contents81525Growth – and how to sustain itGetting value from your valuesPurpose and professionalisation304150Securing your legacy in a digital agePrivate equity:thinking outside the boxA final word
7 Family Business Survey 2018Case studies1320222831Managing growth andthe professionalisationjourneyStewardship and thevalues that inspireFamily values andtax complianceThriving in the faceof digital disruptionAdil Popat,Simba CorporationJudy Muigai & Sunny Vikram,PwC KenyaThe new revenue standard‘IFRS 15’ – Is your businesscompliant?Dr Raju Mohindra,Dawa GroupAkinyemi Awodumila,PwC KenyaAlex Muriuki,PwC Kenya3638434648How can family ownedbusinesses retain talent?Challenging the oldways of doing businessAccess to funding –a post rate cap conundrumJane Kithela,PwC KenyaMihir Shah,Bidco AfricaPerspectives of a privateequity investor in familyowned businessesFraud and corruption infamily-run businesses – is thebond strong enough?George Odo,AfricInvestIsaac Otolo,PwC KenyaSamuel Marete,PwC Kenya
8 Family Business Survey 2018Growth – and how tosustain itThe 2018 survey of family businesses reveals greatconfidence in the future, with over 80% of respondents inKenya predicting steady or aggressive levels of growth overthe next five years.
9 Family Business Survey 2018The 2018 survey results showsthat family businesses in Kenyaare in robust health, with revenuesexpected to continue growing forthe vast majority (82%), comparedto 84% globally, with 30% of Kenyarespondents saying that growth will be‘quick’ and ‘aggressive’ compared to16% globally (see Exhibit 1).74% of our Kenya respondentsexperienced revenue growth in thelast 12 months before the surveywas conducted, compared to 69%globally. This is a slight improvementfrom the 71% in Kenya and 64%globally who reported revenue growthover the same period when we lastconducted the survey in 2016.These findings echo what we foundin the private company cut of ourglobal 2018 CEO Survey, where asolid majority of private company chiefexecutives said they were somewhatconfident or very confident about theircompany’s growth prospects in thenext 12 months.Of the 722 private companyexecutives polled for that report, 85%said they were somewhat confident orvery confident about their company’sgrowth prospects in the next 12months.Exhibit 1: Growth aims over the next two years83%3084%16Expect growthGrow quickly and aggressively5268Grow steadilyConsolidateShrink1713KenyaGlobalIn 2016, 84% of businesses in Kenya and 85% of Globalbusinesses expected to grow over the next five years
10 Kenya Family Business Survey 2018Yet there is a nagging sense amongmany family businesses that thetrajectory of growth over the nexttwo years and beyond can’t easily becharted, given a set of key challenges(see Exhibit 2).This is reflected in the steadilydeclining percentage of Kenyarespondents who anticipate growthover the next five years: 88% in 2014;84% in 2016 and 82% in 2018.The top five challenges in Kenya were:corruption (72%), accessing the rightskills and capabilities (52%), pricesof energy and raw materials (52%),increasing international competition(52%) and the need to innovate to stayahead (50%).Both globally and in Kenya oursurvey respondents shared concernsabout new market entrants andtheir potential to topple establishedbusinesses.However, fewer businesses inKenya (35%) feel vulnerable todigital disruption compared to the2016 survey (40%) results. Thisresult stands in contrast to ourglobal survey, where 30% of globalrespondents feel vulnerable comparedto 25% in 2016.Exhibit 2: Key challenges over the next two yearsGlobalCorruption in the countries where you operate7223%Accessing the right skills & capabilities5260%Prices of energy & raw materials5243%International competition5238%The need to innovate to keep ahead5066%Economic environment5056%Regulation5043%Domestic ion of the a management3039%Access to financing2625%Conflict between family members1314%The growth of artificial intelligence/robotics1122%International tax reform1116%711%The UK's decision to leave the EU
11 9Family Business Survey 2018 PwC Global Family Business Survey 2018Our hat firstfirst-generationfamilybusinessesgeneration familybusinessesclearlyoutperformthosethoserun byrunsubsequentclearlyoutperformbygenerationsin their abilityto achievesubsequentgenerationsin theirdoubledigit growth,highlightingtheabilityto achievedoubledigit growth,needtobalancebusinessmodelhighlighting the need to balancecontinuity with an appetite forbusiness model continuity with andisruption (see Exhibit 3).appetite for disruption (see Exhibit 3).Reconciling optimism with concern willReconcilingoptimismwith concernnaturally seemchallenging.But one bigfor thefuturethatwill emergesnaturallyisseemtakeawaythis: thosechallenging.But onethatclearfamily irfromthe Kenyavaluesand purpose andnailing downa clearstrategicplanrespondentsis thata valuesandare showingway. Specifically,purposedriven thestrategicplan is criticalwhoandsaidchallengingthey deliverfor arespondentsfast changing10% orenvironment.more annual growth tend tobusinesshave some consistent attributes (seeSpecifically,of KenyaExhibit 4, 87%page 10).Eighty-four percentsay they havecleartheysenseof agreedrespondentssaida thathaveaandcomparedclearvaluessenseof purpose,agreed valuesandto76% ofthat hadcomparedslower growth.purposeasthosea business,totwo-thirds (63%) said they79%Almostglobally.intend to make significant strides inAnddigital48% capabilitieshad a fully-costed,(compared to 54%formalisedand documentedamong businessesthat havestrategicslower55%had ofa fullycosted,plan,growth).similarAndto the49%globalformalisedwhoand documentedstrategicrespondentssaid the same.planfindings(compared46%it forthe toThesetell withus thatpaysslowergrowthgroup).Thistellsusandthattake an active approach to valuesit pays to take an active approach topurpose, and clear strategic planning.values and purpose.Exhibit 3:bybygenerationrunningthe ningthe business48%44%42%Single-digit sales growth41%35%32%32%28%Double-digit sales n4thgenerationGeneration running the businessBase: all 1/2/3/4/5 generation global respondents (2018: all answering n 1,040/1,082/480/187/127)Source: PwC Global Family Business Survey 20185th generation
12 Kenya Family Business Survey 201810 PwC Global Family Business Survey 2018One of the main findings from our2016surveyin toKenyaand globallyIt alsopaysplan ahead.Mid-termwasstrategicthat mid-termstrategicplanning – over aplanningthree - to(overa threeto five-yearfive-yeartimeframe – istimeoftenframe)oneis oftenof themissingbiggestmissingof theonebiggestpiecesof thepuzzlefor familypiecesof thepuzzlebusinesses.for family Thiswas also (https://www.pwc.com/a theme of our 2016 surveybusinesses(The ‘missing middle’: Bridging theke/en/publications/family-businessstrategy gap in family egroups:respondents fall into three groups:Thefirstfirstgroup,group,makingmaking upup 21% Theofthetotal,hasnostrategic11% (21% global) of the totalplan at all. These ‘low-strategicrespondents in Kenya, has noplanners’ seem to be more focusedstrategic plan at all. These ‘lowon keeping the boat afloat thanstrategic planners’ seem to bethinking about where it’s going.more focused on keeping the boat afloatThe secondgroup makesupthan thinkingabout whereanotherit’sgoing.30% of the total. Thesecompanies have a plan in mind, The second group,making upbut it is not far advanced; it isn’t41% (30% global) of the totalexplicit about costs or methodsrespondents in Kenya have a planfor achieving the company’s goals.in mind, but it is not far advanced;Together, these first two groupsit isn’t explicit about costsrepresent a little more than half oforthemethodsfor achievingcompaniessurveyed,theand, asbusiness’goals.Together,thesea whole, they aremore likelyto fallfirsttwogroupsrepresentalittlebehind over time.more than half of the companies surveyed,The third and,group,remainingasthea whole,they49%, are those with a costed,are more likely to fall behind overformalised and documented midtime.term plan. Within this, we have Thethird agroup,the remainingdefinedsub-group(36%) of48%(49%global)of respondents‘high-strategic planners’who alsoinhaveKenya,are thosewith a costed,financialand non-financialformalised and documented midtermperformancestrategic plan.keyindicators (KPIs).Thereis a trategicwiththeseany sortof strategicplannersplan, 78%otherishighvalue groups.say andthe planembeddedin itutefinancial56%56%ofthecompanieswithasay the plan has defined financiallevel of philanthropy;53% ofand highnon-financialkey performancethose with a robust, documentedindicators (KPIs) in place to measureand communicated successionthe progress and success of the plan.plan; 46% of businesses withIn both cases, the percentages ofannual turnover above US 100m;global respondents who say the same42% of companies with doubleis higher (83% and 65% respectively).digit growth; and 41% of thosewith a high73%levelofofKenyafocus onFurthermore,digital technology.respondentswith a strategic planhavecommunicatedthe areplan ally)andinto63%translating their strategic goalsexternally(53%globally).everyday practices and building upthesurveyhabits showsthat, overtime,create aThethatin Kenya,distinctivelegacy.there is a clear need to developformalised and documented midterm strategic plans, to embed themin the financial planning processand to define financial and nonfinancial KPIs to measure progress.Communicating these plans internallyis certainly a priority, whereas externalcommunication may be on a needto-know basis (such as with potentialpartners with a financial interest).Both globally and in Kenya, highstrategic planners are translating theirstrategic goals into everyday practicesand building up the habits that, overtime, create a distinctive legacy.Exhibit 4: Behaviours of family businesses with 10% growthExhibit 4: Behaviours of family businesses with 10% growth84%63%55%22%Have a clear sense of agreedvalues and purpose as a company(vs. 76% among those who have 10% growth)Have a fully costed, formalised anddocumented strategic plan(vs. 46% among those who have 10% growth)Are aiming to make significant stepsin terms of digital capabilities(vs. 54% among those who have 10% growth)Are aiming to earn the majority ofrevenue from new products or services(vs. 16% among those who have 10% growth)Base: all global respondents with 10% / 10% growth (2018: all answering n 1,000/1,001)Source: PwC Global Family Business Survey 2018
13 Family Business Survey 2018Managing growth and theprofessionalisation journeyDr Raju Mohindra, Founder and ChairmanDawa GroupTwenty-five years ago, Dr Raju Mohindra, hiswife Reema and his friend Dr Ajay Patel foundedMedisel (Kenya) Limited as a wholesale distributorof generic medicine. Their mission was to createan enterprise that would avail high qualitymedicine to Kenyans.Medisel started off as a marketing and distributioncompany selling drugs sourced from India andChina. In 2004, they acquired Dawa Limited, arundown pharmaceuticals manufacturing plantunder receivership, which they later upgraded tobegin manufacturing drugs for local and regionalconsumption.Dawa Limited has over the years become asuccessful pharmaceutical manufacturingcompany and is the flagship of the Dawa Group.The Group acquired a chemicals business,KEL Chemicals Limited, three years ago tocomplement the Group’s established real estateand pharmaceuticals divisions. Dawa Group’scommercial and real estate investments are inThika and Nairobi.Dr Mohindra, Reema and Dr Patel are closebusiness partners who set the stage for acohesive and robust business that now employsover 500 people across Africa. Dr Mohindratrained as a radiologist and is the currentchairman of the group while Reema, his wife, isa management consultant and the Chief FinanceOfficer. Dr Patel, a professional pharmacist, is thegroup’s operations director.“Dawa Group has been growing steadily since itshumble beginnings in 1994,” said Dr Mohindra.Expanding the businessDr Mohindra is bullish on the future outlook of thebusiness and the opportunities in the East Africanregion. With a strong footprint in East Africa andFrancophone West Africa, plans are underway toexpand to Ethiopia, Angola and Mozambique.“Pharmacy is an exact science and cannot becompared to the fast moving consumer goodssector, and therefore access to markets has tobe specialised and optimal at all stages of thesupply chain. The inspections at the borders arepunitive,” he adds. Recent investment of overUS 40 million in professionalising the businessand upgrading the operations across variousfunctions are expected to transform the Groupand facilitate their expansion plans.On the Government’s role to support thepharmaceutical sector, Dr Mohindra notes that
14 Kenya Family Business Survey 2018more could be done by the regulatorybodies. “There needs to be increasedrestriction on imports for some drugsso as to promote local manufacturers.For instance, Ghana and other WestAfrican countries have restrictedimports of some common drugs whichhas boosted the local pharmaceuticalmanufacturing sector,” he explains.He lauds the inspections by bodieslike the United Nations IndustrialDevelopment Organisation (UNIDO) toclamp down on substandard drugs,emphasising that quality is key to theirsector and society in general.Customer preferences and theregulatory environmentMarket dynamics have changedover time for the group’s “typical”customer. The middle class has grownand it is apparent that lifestyle choicesare very different as compared to 20years ago. Drugs that sold readily 20years ago included broad spectrumdrugs like basic antibiotics. Withtoday’s fast-paced lifestyle, poorfood choices, and reduced outdooractivities for most people, lifestylediseases have slowly crept up inprevalence. Consequently, thedemand for the drugs to treat lifestylediseases has risen.The Group has had to develop adifferent product mix and over theyears introduced an array of moreadvanced locally manufactured andimported drugs to meet new andevolving demand.ProfessionalisationThe Group has embarked on theprofessionalisation of the business,driven by the implementation of robustinformation technology managementsystems primarily to streamlinesupply chain processes and steadilyautomate manufacturing operations.Dr Mohindra also acknowledgesthat the transformation of the grouprequires the diversification of thesenior management and extendingbusiness
Perspectives of a private equity investor in family owned businesses George Odo, AfricInvest 28 The new revenue standard ‘IFRS 15’ – Is your business compliant? Akinyemi Awodumila, PwC Kenya 46 Access to funding – a post rate cap conundrum Isaac Otolo, PwC Kenya 31 Thriving in the face of digital disruption Alex Muriuki, PwC Kenya 48 Fraud and corruption in family-run businesses – is .
KMLTTB Kenya Medical Laboratory Technicians and Technologists Board . v The Second Kenya AIDS Strategic Framework 2020/21-2024/25 KMoT Kenya Mode of Transmission KMTC Kenya Medical Training College KNBS Kenya National B
Test Name Score Report Date March 5, 2018 thru April 1, 2018 April 20, 2018 April 2, 2018 thru April 29, 2018 May 18, 2018 April 30, 2018 thru May 27, 2018 June 15, 2018 May 28, 2018 thru June 24, 2018 July 13, 2018 June 25, 2018 thru July 22, 2018 August 10, 2018 July 23, 2018 thru August 19, 2018 September 7, 2018 August 20, 2018 thru September 1
KENYA DEPOSIT INSURANCE ACT No. 10 of 2012 Revised Edition 2012 Published by the National Council for Law Reporting with the Authority of the Attorney-General www.kenyalaw.org [Rev. 2012] No. 10 of 2012 Kenya Deposit Insurance 3 [Issue 1] NO. 10 OF 2012 KENYA DEPOSIT INSURANCE ACT ARRANGEMENT OF SECTIONS
PROSPECTS AND STRATEGIES FOR INVESTMENT PROMOTION IN KENYA. VOLUME I!: PROMOTING PRIVATE INVESTMENT IN KENYA . January 1986 . SRI Project Number IMU (550)-1463 Contract Number 615-0213 PSI 02 . Prepared for: The Investment Advisory and Promotion Centre Republic of Kenya and USAID/Kenya . By: International Policy Center
the survey comprised of the Kenya National Bureau of Statistics (KNBS), Financial Sector Deepening Trust (FSD) Kenya and Central Bank of Kenya (CBK). These three institutions have worked together for the last ten years in developing the FinAccess suite of surveys. Stewardship of the survey was provided by the three institutions and
Catan Family 3 4 4 Checkers Family 2 2 2 Cherry Picking Family 2 6 3 Cinco Linko Family 2 4 4 . Lost Cities Family 2 2 2 Love Letter Family 2 4 4 Machi Koro Family 2 4 4 Magic Maze Family 1 8 4 4. . Top Gun Strategy Game Family 2 4 2 Tri-Ominos Family 2 6 3,4 Trivial Pursuit: Family Edition Family 2 36 4
This document, Taking the Kenya Essential Package for Health to the Community: A Strategy for the Delivery of LEVEL ONE SERVICES, intends to make KEPH a reality at level 1 – the community level. The document was developed through wide consultation among stakeholders in the sector to help revitalize community health services in Kenya.
business,insurance risk transformationor activities directly arising frominsurance risk transformation(for example,general insurance businessoraccepting deposits) thefirmmay choose to comply with Principles6, 7, 8 and 9 as if all itsclientswerecustomers. Alternatively, it may choose to distinguish betweeneligible counterpartiesandcustomersin complying with thosePrinciples. If it chooses to .
