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| Olympia Capital Chief Executive Officer, Mr Michael Matu |
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OTHER FINANCIAL NEWS |
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Nairobi Stock Exchange (NSE) listed company, Olympia Capital Holdings Limited (OCHL), expects to see a return on its investments in the South African market within the next 12 months.
The company says it has adopted a new business model in the South African market, which has led to the setting up of two business units, operating as Yokota SA and Natwood Africa. Speaking during a media briefing in Nairobi, OCHL Chief Executive Officer, Mr Michael Matu explained that the new business model involves operating the two businesses with minimal debt, a leaner staffing structure and lower overheads, with a specific plan to avoid the large retail market in South Africa, where it is difficult to manage margins.
“We expect the two new business units to contribute positively to the bottom line of the group in the 2010/2011 financial year, which begins on March 1, 2010,” added Mr Matu. As part of the regional expansion strategy, OCHL has invested US$ 1 million in the two business units, most of which (90 percent or US$900,000) was mobilised from internal group resources. The balance of 10 percent or US$100,000 was raised from a line of credit obtained from Stanbic Botswana.
Mr Matu said OCHL had, through Olympia Capital Corporation (OCCL) their Botswana listed subsidiary, acquired the Yokota brand name and the manufacturing plant belonging to Natural Wooden Products (pty) Limited (NWP) from the liquidators of Plush Products (pty) Limited (PPL) and NWP, respectively. OCCL acquired a 74 percent stake in PPL in 2006 as part of the regional expansion strategy. PPL manufactured and distributed curtain tracking and related products sold under the Yokota brand. OCCL purchased NWP in mid 2008 and the company manufactured wooden lifestyle products.
Mr Matu explains that the decision to take over the Yokota branded products and the NWP manufacturing plant was informed by the huge market potential. ‘’We see ourselves best placed to continue leveraging the popularity of the products in the South African market and export potential of the Natwood products as we seek to realise gains from our regional expansion strategy’’.
OCHL owns 100 percent shares in Dunlop Industries Limited (Kenya), a 49 percent stake in Avon Rubber Limited (Kenya), 13 percent stake of Heri Limited (Kenya), 50 percent of Mather + Platt (Kenya) and 53 percent shares in OCCL (Botswana) . OCCL holds 100 percent shares in Kalahari Floor Tiles (Botswana), which owns Gaborone Enterprises Limited.
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