Nairobi’s Eastern by-pass turning into new industrial zone
The Eastern bypass is taking shape as the next industrial hub with investors keen to take advantage of the room for expansion and better infrastructure.
Three industrial parks are coming up along the road in addition to other independent production facilities such as the Sh1.3 billion Reddamac Tannery.
The three parks — Tatu City Industrial Park, the Infinity Industrial Park that was launched Friday and the Viken Thirty Industrial Park — will add over 650 acres of space for manufacturers and small and medium enterprises (SMEs).
While some of the manufacturers such as Chandaria are setting up additional production facilities, others including Dormans are completely moving from the Industrial Area near Nairobi CBD.
“The challenges of working in the CBD (Central Business District) and central Nairobi have become greater over time as it has become more crowded. Out here we will avoid all that,” Dormans Coffee chairman Jeremy Block said when they purchased 10 acres at Tatu City.
The developers of the parks are providing serviced plots which the manufacturers lease and set up their facilities.
The exodus from the inner Nairobi will also affect the Kariobangi Light Industries with some of the businesspeople who operate here coming together to form 47-acre Viken Thirty Industrial Park in Ruai.
Here, the 150 entrepreneurs who are behind the venture will have ample space to operate modern facilities and will not have to compete with food kiosks, vegetable stalls and juakali shops as they currently do.
“For a long time, I’ve had this dream to move from Kariobangi to a better location where we can implement international standards in manufacturing,” Joseph Maina founder and boss of Alpha Paints said in a previous interview.
“We have had numerous fires that have cost lives. Many of the industries here lack ventilation.”
LAND IS CHEAPER
For industries, the general trend to relocate is motivated by the availability of room for expansion offered by the sparsely populated areas along Eastern bypass where land is cheaper.
They are also looking at the better infrastructure especially roads and the services offered by the parks’ developers.
The construction of Eastern bypass which links to Thika Road, the Jomo Kenyatta International Airport and the Mombasa-Nairobi highway and the availability of large tracts of unused land have been the main ingredients leading to the emergence of the new industrial hub.
Tatu City which is the front-runner has signed up an impressive list of industries including Chandaria, consumer goods maker Unilever which acquired 70 acres, tissue paper maker Kim-Fay East Africa and Maxam, the distributor of Heineken beer in Kenya.
Coffee maker Dormans and consumer goods manufacturer Bidco that acquired a 78 acres last year are both on the ground developing their facilities.
The industrial parks are providing a plug-and-play concept where they develop all the infrastructure- internal roads, water supply, power, sewerage- and other amenities like hospitals, fire station and mall within the same compound.
“The park is excellent for multinational and local industries as it provides serviced plots where they can just come and set up rather than try to develop these amenities on their own,” said Ashok Shah, the chief executive of Abacus Property Consultants who are developing Infinity.
The government has sweetened the deal for those looking to develop industrial parks by removing value added tax (VAT) on goods and services used in construction of infrastructure works in industrial and recreational parks of 100 acres or more.
The VAT tax breaks are applicable to those who set up the industrial parks in Nairobi, Nakuru, Kisumu, Mombasa and Eldoret and are subject to the approval of the Treasury Secretary
Industrialisation Secretary Adan Mohamed on Friday said the drive to develop more industrial parks is aimed at lifting manufacturing share of the gross domestic product (GDP) to 15 per cent in the medium term.