Chandaria Industries has been named in the London Stock Exchange Group (LSE) Companies to Inspire Africa 2017 report, which showcases the continent’s dynamic private, high growth companies that have come to the attention of major global investors.
The inaugural report, launched in partnership with African Development Bank Group, CDC Group, and PWC, which contributed their expertise to the report by nominating companies they identified as high growth businesses, was sponsored by FTI consulting, Citigroup and Diamond Bank.
The report nominated 343 companies in 42 African countries based on their company status, growth, size, and auditability. The companies had to have been privately held, and demonstrated growth over the past three years, in revenue, employees, and output or geographic expansion.
In addition, the company’s annual revenue as an independent company or as a consolidated group had to be less than $1bn for the years 2012 -2015, based on the company’s audited financial accounts, which had to be audited and accredited by a ‘Big Four’ Firm or a local affiliate.
The selection of Chandaria comes after its recent announcement of its entry into Malawi, as its 12th market in Africa, and as part of a regional expansion that has seen it move to earning a fifth of its revenues from its African export markets.
“As a company, we’ve strived over the years to build an industry that not only promotes Kenyan brands through manufacturing 100 per cent of all our products in Kenya, but also creates employment to the over 20,000 people who are employed in our waste paper collection and distribution sector. It is, therefore, a great honour that our efforts are being recognised not only within the country, but even globally,” said Darshan Chandaria, Chandaria Group CEO.
In addition, “We are motivated to continue providing affordable basic hygiene and sanitation to over 100m consumers across Africa and in the process transform lives,” he added.
According to the World Bank, “small and medium-sized enterprises (SMEs) account for up to 90 per cent of all businesses across Sub-Saharan African markets,” illustrating the significance of the SME sector to the continent’s future. Moreover, most of the SMEs nominated in the LSE report have been financed through equity finance, with major investors capitalizing on these high-growth firms.
“Equity capital is demonstrably more effective at helping dynamic start-ups and high-growth companies become the major companies and employers of tomorrow than traditional sources of debt finance has proved to be. Debt is a short-term fix that does not encourage long-term growth,” said the report.
“It may be a suitable funding tool for established blue-chip multinationals, but is not designed to help innovative companies that need capital to grow and invest. Any small company in receipt of a bank loan must prioritise managing that debt or risk default, rather than being able to use all its financial and human capital to invest,innovate and grow.”
Overall, Kenya topped the LSE list in Eastern Africa, with 50 of the country’s companies featured in the report. This was followed by Uganda, which had 21 of the nominated companies, and Tanzania with 16 companies.
“I commend London Stock Exchange Group and its partners for Companies to Inspire Africa, an initiative that showcases the continent’s success stories to global investors, policymakers and other important stakeholders. The companies profiled not only generate vital employment opportunities and contribute to sustainable economic growth but are also bastions of best practice and good corporate governance,” said Arunma Oteh, Treasurer World Bank.
“They have also had to weather the challenges that African private entities often have to contend with, notably a difficult operating environment, weak infrastructure and inadequate access to finance. These challenges must be urgently tackled to foster the much-needed critical mass of companies that will enable the continent to realise its widely acknowledged economic potential,” she said.