NAIROBI (Reuters) - Kenyan industrial magnate Manu Chandaria said his family-owned conglomerate Comcraft Group is in discussions about taking parts of the business public, reflecting its growing size and need for capital as it expands internationally.
Comcraft Chairman Chandaria said both the steel and aluminum sections of the family business - which in Africa mainly make corrugated iron roofing and pots and pans - could go public within the next two to three years.
“Ultimately groups of our size cannot remain only private,” Chandaria told the Reuters Africa Summit at his home in a lush Nairobi suburb, perched on the edge of the dense Karura Forest.
But with Comcraft companies rapidly expanding in Asia and Africa, especially in Nigeria, Ethiopia, Kenya and South Africa, Chandaria said there are fears among some in the group that an initial public offering (IPO) could hinder growth due to short-term shareholder demands.
“Some of (our) top management still don’t think that we are ready for taking it public. I would have taken it public a long time back,” said Chandaria, who is also a leading Kenyan philanthropist.
Formed during World War I by Chandaria’s semi-literate father and relatives who immigrated to colonial-era Kenya from India, the business is now one of East Africa’s biggest. The group has 40,000 employees across 45 countries.
U.S. business magazine Forbes in 2011 estimated Comcraft to be worth $2.5 billion, the last time it valued the business. Chandaria declined to comment on the current value of the group.
Chandaria added that some sections of the business could merge ahead of the IPO, which could be one of Kenya’s biggest if the Chandaria family decide to list on the Nairobi bourse.
The 85-year-old said the family’s drive was undiminished ahead of the business’s centenary in 2016. A recent trip to fast-growing Ethiopia, where he observed new railways, roads and
offices, also confirmed Chandaria’s optimism about Africa’s potential.
The Horn of Africa state has become a symbol of the “Africa rising” narrative, with companies such as Diageo (DGE.L) and Hennes & Mauritz (H&M) (HMb.ST) seeking to set up production in a country once synonymous with famines, coups and communist-era purges.
To the frustration of many foreign companies, the government has not loosened its grip on the banking, telecoms and other state-run sectors in the country of 90 million people. But Chandaria believes the rulers of Africa’s second-most populous country will follow China’s model and loosen controls.
“It’s opening up very fast,” he said, animated about Ethiopia’s chances of becoming a manufacturing powerhouse.
Over the next two years Comcraft plans to treble the number of factories in Ethiopia to nine, even though in the 1970s the regime that overthrew Emperor Haile Selassi also seized the Chandaria businesses, a fate the family also suffered in Uganda.
In neighboring Kenya, Chandaria said Comcraft is looking to build several factories and grow 50 percent over three years.
Comcraft is also targeting expansion in Nigeria, where it already employs more than 4,000 people, hoping to tap into a market boasting a growing middle class among its 140 million residents.
Chandaria said the group is undeterred by the threat from Islamist Boko Haram rebels and has set up businesses in their stronghold areas.
“Yes, it is difficult, it’s demoralizing but you do not see that as a stop,” he said. “If you live in the sea, you have to live with sharks.”
Editing by David Holmes