Building a way to beat housing shortage

Chinese firms are bringing new technologies and a reputation for quality work to help close gap in Kenya

Chinese companies are helping to fill the gap in Kenya's real estate sector, industry insiders in Nairobi say.

Daniel Ajili Ojijo, executive chairman of Homes Universal Ltd, a real estate consortium with nearly a dozen subsidiaries, says foreign participation has brought in housing innovation and alternatives.

"New technology will enable the country bridge the housing deficit, especially in the mid and low income bracket," says Ojijo.

Ojijo cites Boleyn Magic Wall Panel Ltd, a Chinese company that has constructed a plant to make precast concrete building components in Kitengela, 30 kilometers south of Narobi.

Speaking during the opening ceremony of the 21th Kenya Homes Expo, Boleyn Managing Director Jack Liu says precast concrete technology will not only lower the cost and time needed to build housing, but also help replace inferior construction techniques.

"Our factory will manufacture products like wall panels, half slab, hollow core slab for flooring and roofing, columns, pressurized beams, road barriers, railway sleepers, highway and bridge double-T beams and staircases," Liu says.

Boleyn products are expected to enter the local market next month.

The Chinese company has announced its intention to help supply as many as 30,000 housing units a year with the opening of its factory. The company has been awarded a contract to build 750 housing units for the police force, Liu says.

This year the government has set aside about $14 million to construct 80,000 homes for the security force.

"We have employed about 200 professionals at the factory and more than 800 unskilled and skilled workers at our sites," Liu says.

The country's demand still outstrips supply. The market supplies 60,000 homes a year against an annual demand of 300,000, according to recent figures from a survey done by the Lands, Housing and Urban Development Ministry.

The building and construction sector continues to be a key driver of economic growth in Kenya. It has persistently recorded more than 8 percent growth and has contributed about 12 percent of the GDP in the past five years.

"We are the biggest employers that come close to tourism," says Ojijo, whose company organizes the homes expo at the Kenyatta International Convention Centre this month. The event witnessed a 40 percent increase in participation, particularly from foreign players.

"No economic growth can thrive without private sector support," says Fred Matiangi, acting cabinet secretary in the Lands, Housing and Urban Development Ministry.

"The housing deficit is a big opportunity for investors. We are looking at ways of expanding the construction sector by using alternative building materials."

He decried the increasing incidence of buildings in the country collapsing, saying poor workmanship and corruption is to blame. He says Chinese contractors are well positioned because of their reputation for speed and quality work.

Martin Etyang, a professor of economics at Kenyatta University, says Chinese contractors are not unfairly taking away business from local players. "I want to believe that these contracts are being awarded competitively through a proper tendering process. Upon completion, they will benefit both China and Kenya, and I don't support the idea that local contractors should be protected from foreign contractors who bring in their expertise."

He adds emphatically, however, that more Kenyan workers should be absorbed into these projects.

"Kenya has a wealth of expertise in the market. The nature of these projects will yield capital gains which are felt in the long term rather than in the short term."

Sultan Palace Development Ltd, which has started construction of a luxury beach resort in the Kenyan coastal county of Kilifi, says that 98 percent of its employees are locals from the coastal area, according to the company's general manager, Liu Tiancai.

He says because his projects have borrowed heavily from the predominant Swahili culture, it was only prudent to employ locals. "How else was I to perfect the unique, flat-roof design of our luxury homes?" he asks.

The company has previously worked in Namibia and Zambia and Liu says Kenyan workers are good. "They are hard working and tenacious. That is why we are investing in a project of this magnitude here in Kenya," he says.

The company's 5 billion Kenyan shilling ($53.3 million) resort is on 17 hectares on the beach 25 kilometers from Mombasa, according to the Kenya Business Review.

Jay Ma, manager of Mega Deco Interiors, shares Liu's sentiments. The company sells high-end lights, chandeliers, wooden flooring and door locks among other home accessories. She says at least 60 percent of her workers are locals and they are quick learners. She says competition is tough in her line of work but she has invested heavily in bringing in quality products.

"I know people think that Chinese goods are substandard, but the more they use our products, the more they understand that we do not compromise on quality," says the young entrepreneur, whose booth was busy at the expo.

lucymorangi@chinadaily.com.cn

(China Daily Africa Weekly 04/24/2015 page15)