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Kenya Report
Marcopolis presents Kenya Report focused on topics such as investments, doing business, economy and regional integration, featuring interviews with Kenya's leaders. The sectors under review in this issue are agriculture, banking, energy, industry, telecom, IT, tourism, logistics and many more.
InterviewsOctober 11, 2019
Devki Group of Companies: The Largest Steel and Cement Manufacturer in East Africa
Narendra Raval (Guru), Founder and Group Chairman of Devki Group of Companies
- Written by Sandra Francisco
- Published: October 11, 2019
Interview with Narendra Raval (Guru), Founder and Group Chairman of Devki Group of Companies
What is your personal background?
I came to Kenya from India as a temple priest when I was 16 years old. I worked as a priest for 7 years in India and 3 years in Kenya. Circumstances led me to Kenya because I wanted a better future. I came here and I was working in the temple until I was about 20. After 3 years I had to move on in life. I got married at 22 and started my small hardware shop in Kenya. The hardware shop was in an area where a foreigner could not to do business but that was the only solution I had that was affordable. In 5 or 6 years’ time, I had become the largest steel trader in Kenya. My demand was so high that I had to start manufacturing myself. The first time I went to the bank for a loan, I received about $70,000 and I put up a small steel industry far outside of Nairobi. At that time, I had about 40 to 50 employees, which increased to 70. We fluctuated as the business grew because we were a newcomer and there was a monopoly in Kenya at that time. Those in the monopoly wanted to close me down. It went well, though, and we grew from 70 employees to 5,000 today in Kenya. Today, we are the largest steel and cement manufacturing company in East Africa. Our next mission is to employ 10,000 Kenyans directly by 2022 because our new expansions are coming in. We are an infrastructure and building materials business and we produce cement, steel, and roofing sheets. In this industry, we have three main companies. Devki Steel produces steel, Maisha Mabati produces roofing sheets, and National Cement Company Ltd whose brand name is Simba Cement produces cement. We want to make sure that we are not only doing this for profit but so that each and every Kenyan has a roof over their head and is not living in mud houses, but in affordable cement housing. We do this by reducing our prices to the minimum level so they can afford to buy the cement and steel. Our new ambition is to keep the prices lower and keep the quality better.
Can you describe the sector itself? Is it a competitive market? How do you stand out from the competition?
In steel and cement and roofing sheets there are four manufacturers in Kenya, but we are the largest. We are also the largest steel producer and cement producer in Kenya and in East Africa. We believe in not only the affordable prices, but also the quality which makes us stand out. We have mass production so our cost is much lower than our competitors so we can produce better quality at a cheaper price. This is where we edge out other smaller manufacturers in Kenya.
What are the latest trends in the sector in Kenya?
My dream is for the company to keep growing and in the next 10 years to directly employ 20,000 people. I want to make Kenya import free for the cement and steel industry.
Kenya is a developing country. There are a lot of infrastructure projects coming in. Our GDP is growing about 6% and will continue to grow much higher. If the Kenyan Shilling stabilizes, then the economy will be one of the best in Africa to do business. We import everything in US dollars and pay in Kenyan Shillings. Kenya has a lot of opportunity to grow because 60% of our population is youth and very well educated. We have a very energetic population. Kenya produces over 50,000 graduates each year. I am the chancellor of Egerton University and I was appointed by the Kenyan president. It is named after Lord Egerton from London. It was established in 1896 and is over 100 years old. We have 27,000 students and produce about 4,000 to 5,000 graduates each year. We need to create more jobs. If we do not do that or the government does not facilitate that, there will be a job imbalance. There is major job scarcity at the moment for these graduates. If we do something about it, then the crime will go down, robberies will go down, and security will become better.
What are your CSR activities?
CSR is the priority for our group. I have grown up in poverty and I have seen what it is like to not have enough food or clothes. I realized that it is not easy to digest that. 35 years ago, when I started my small shop, we decided that starting from your neighbor, then to the street, then to the city, that everyone we can reach does not go to bed hungry. We started a food program through Hari Krishna Temple here where we cycled about 300km and raised 15 million Kenyan Shillings. Every day, Monday to Sunday, we feed about 3,000 children through the Hari Krishna Temple. It is not much, but it is better than nothing. We have about 5 schools that belong to the government that we have adopted. We built new classrooms and provided them with teachers. The government does not have many teachers and the pay is not very good. So, we have taken it upon ourselves to provide them with quality teachers, good classrooms, and food for the last 15 years. Education is the only thing you can give to someone that is not material. We also have a fund in our company where 50% of my income goes to charity. That charity goes towards medical, food, and education. We are also building Autism Centers because there are many children suffering in Kenya. Many of these children are locked in their rooms for years because they cannot do anything. Our first Center will be ready this month and it is about 200km from here. We have brought in 40 or 50 children. We provide physiotherapy and food at the Center. A car will bring the children from their house to the Center for the day and then bring them home. We want to give them a life. We also want to help with employment. We want to help more people to become entrepreneurs and self-employed. I have some employees that have been working with me for 35 years. Of course, new people come in when we start new projects. But some of these staff have been with me since we started the business. As they had children, we educated them, then their children were educated, and they then started to work with us. We are now on our third generation. This makes the factories and business a real family which is our dream. We give school fees to about 300 to 600 children every year up to university graduation. We also send locals to Australia, Japan, and China for study. For all of our industries we do not put anything up in Nairobi, but instead we focus on the outskirts and villages where there are no jobs. We go there and put up industry and we change people’s lives. In the Maasai land it is a desert. There is no industry. They only depend on their cows. We set up our cement factory there. We gave them jobs and technical training because they are not educated. We have about 300 Maasai working and they go home with money which they may have never seen before. Wherever we build a factory, we build a school, too. But none of these children were going to school. We studied why they were not coming to school. In one location where we started a factory 5 years ago, there were 50 students. Today, we have 360 children because we started giving them food. They are very honest and hardworking people. There is a lot more we do in CSR. I am also a trustee of an international trust that works with African widows. In Africa, when a woman’s husband dies, she is completely abandoned. We empower these women. We give them sewing machines, we make a small shop for them with our materials, and we give them the first selling material which deals with day to day goods like milk, flour, etc., then they continue to run the business. We do a lot of CSR not for any gain for us, but because it is our duty and our main focus to give back to society.
You just acquired a new cement factory. What is the strategy behind this acquisition?
It was a cement company called ARM Cement which went public and then went bust. We are a cement manufacturer so we saw an opportunity. 37 companies were qualified and out of them our bid was highest so we won the company allotment. It was delayed, however, because the CEO went to the courts. It was all resolved recently and we should be able to start work in a week or two. By getting that cement company, we now have a foothold in Mombasa which is a coastal area which we did not have before. It will also increase our capacity by 4% because of the additional grinding unit we now can operate there.
Project yourself to the future. What do you want to achieve?
My autobiography, “Guru”, is now a worldwide bestseller and has sold almost 3 million copies. It is promoted by Bloomsbury. All the profits on my side go to charity. I wrote this book because I wanted everybody to be successful. If my neighbor is not successful, I am not safe, nor happy. More than that, my dream is for the company to keep growing and in the next 10 years to directly employ 20,000 people. I want to make Kenya import free for the cement and steel industry. Kenya is importing approximately 400 million dollars a year in steel and cement. Our new plants make it a possibility that we will not have to import anything in those industries. By that, Kenya will save 400 million dollars per year in foreign exchange. On a personal note, I also want to make sure that each and every Kenyan has a respectable house. Especially for the youth, we want to see how we can enroll them in creative activities like jobs or entrepreneurship. We teach them, we support them, and we educate them so they can achieve something in their life. We want to help them out of poverty which is rampant in Africa and Kenya especially. Before I leave this world, I want to see everyone happy, employed, and with food on the table. Maybe it is impossible, but it is my dream.
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