US firm Honeywell - AmCham's new member - opens Nairobi office

Mr Shane Tedjarati: We are keen on acquisitions. PHOTO | COURTESY

A New York Stock Exchange-listed US conglomerate has opened its office in Nairobi, eyeing East Africa’s booming energy, airline, security and construction markets.

Honeywell, which has opened an office in Nairobi’s Westlands, is involved in a wide range of activities including the manufacture of aircraft engines, and production and installation of security and airport equipment.

The multinational whose annual turnover of $40.3 billion is almost as big as Kenya’s GDP of $55 billion (about Sh5.5 trillion), is also involved in data management, automation of industrial operations and developing cyber security software.

“We were looking at five to six east African countries but decided the best place for our regional office was Nairobi due to the vibrant market, talent and geographical location,” said Honeywell’s President for Global High Growth Regions Shane Tedjarati in an interview.

Mr Tedjarati said Honeywell is keen on buying out local companies to boost its growth plans. Honeywell joins a growing list of multinationals that have set up regional offices in Kenya’s capital.

US-based Frontier Strategy Group, which tracks emerging markets, last year ranked Kenya as the second most preferred destination in Africa after Nigeria for multinationals seeking to set up in Africa.

The survey was based on the views of 200 multinational corporations, including global giants Coca-Cola and General Electric.

The Mombasa seaport and the Jomo Kenyatta International Airport hub make Kenya a particularly strategic and attractive investment destination for companies seeking an entry into the wider eastern Africa.

Honeywell intends to use its Westlands office to penetrate the region. The US giant has had a presence in the Kenyan market for some time, giving it a feel of the demand for its services and products.

In 2012, it bagged a contract to manage data and safety for Kenya Electricity Generating Company’s (KenGen) geothermal plants at Olkaria, Naivasha.

This included deployment of technology for emergency shutdown of plants and on-site engineering expertise. The same year, Honeywell won another contract worth $2.4 million (Sh252.6 million) to deploy a pipeline receipt system for local oil marketer Petrocity and automate its oil storage at Konza.

Mr Tedjarati said the firm’s airline and airport services are widely used in the region including airfield lighting, access control, fire safety, video surveillance and command and control. Others are cabin entertainment, flight management and cockpit displays.

“We have chosen industries that have a tailwind for growth,” said Mr Tedjarati. “The region’s aerospace provides us with immense opportunities.”

The recent discovery of recoverable oil in Kenya and Uganda and gas in Tanzania bodes well for the company’s operations.

Honeywell’s appetite has also been whetted by Ethiopia’s increased development of hydro-electric power and geothermal energy in Kenya alongside construction works like the standard gauge railway line and the Lamu Port South Sudan Ethiopia Transport corridor.

The company rides on its automation tool Experion Process Knowledge System (PKS) to interconnect different operations of a plant, organisation or industry. The Fortune 100 firm is also involved in seaport automation, oil pipeline, and smart home solutions.

Google, Visa, MasterCard, KFC, Pepsi, Travelport and Dow Chemicals are multinational corporations that have chosen Kenya’s capital as either their regional or Africa headquarters.

Source: Business Daily