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Bleak outlook for salt firms as revenue hits 36-year low

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Revenue from salt production dipped to a 36-year low in 2018, wrapping-up a bad year for the industry which is battling billions of shillings in tax demands from the government.

The industry realised Sh19.4 million in revenue from salt mining last year—the lowest annual performance since 1982, data by the Kenya National Bureau of Statistics(KNBS) show. Salt firms earned Sh98.9 million in revenues in 2017—meaning earnings fell five times in 2018.

Production was equally subdued in the period with miners recording a 71.3 percent drop in output to 12,419 tonnes from 43,245.1 tonnes the previous year. The last time output was this low was in 2010 when 9,980 tonnes were mined.

Attempts by the Business Daily to get comment from salt manufactures were fruitless even though sources attributed the pitiable performance last year on uncertainty about tax demand by the State.

Last year, three firms– Krystalline Salt Ltd, Malindi Salt Works Ltd and Kensalt Ltd — were taken to court by the Water Management Resources Authority (Warma) for allegedly failing to pay taxes for using the sea water in mining the commodity.

The Water Act, 2002 and the Water Management Resources Rules of 2007 vest Warma with the power to issue water permits and charge for its use. The charges demanded from the three companies are for varied periods, for each of the company, but cover between October 2007 and March 2017.

Krystalline, a firm that commercially produces salt at Gongoni and Marereni on the Kenyan coast, lost an appeal to stop Warma from demanding Sh2.079 billion in respect of alleged unpaid water usage charges for the period between October 1, 2007 and April 19, 2017.

The Environment and Land Court at Nairobi had ordered Krystalline to pay the sum together with litigation costs and two percent compound interest on the sum.


The firm told the court that there was the real danger that its business would be destroyed, staff retrenched, operations shut down and its assets disposed of. Kensalt was also sued by Warma to pay Sh270.2 million for use of water in the course of salt manufacture while Malindi Salt Works was ordered to pay Sh7.56 billion.

The argument by the two firms that water is God-given and that no one can claim ownership or control of the sea water was thrown out.

The rulings meant increased cost of doing business for salt mining firms as they now have to start paying for use of water, a cost that they had not factored in before.


The added cost is, however, yet to reflect much on the retail price. A kilogramme of salt averages Sh25 while the smallest packet- 250 grammes- costs about Sh5.

Production of salt has been declining over the years. In 1988, the country produced 88,193 tonnes—which compared to last year translates to an 86 percent drop.

Salt consumption at homes has also been dropping, mainly on health concerns, as the World Health Organisation (WHO) pushes for no more than five grammes a day in adults.

This means, in a year, an adult should not consume more than 1.825 kilogrammes, being just about Sh36.50 cost going by Sh5 per 250-gramme packet.

WHO recommends that there should be no adding of salt during preparation of food. It is also against placing of a salt shaker on the table in restaurants. Further, it calls for limiting of consumption of salty snacks.


“Salt intake of less than five grammes per day for adults helps to reduce blood pressure and risk of cardiovascular disease, stroke and coronary heart attack,” says WHO.

“Key salt reduction measures will generate an extra year of healthy life for a cost that falls below the average annual income or gross domestic product per person.”

However, most people consume too much salt—on average nine to 12 grammes per day, or around twice the recommended maximum level of intake, according to WHO data.

WHO wants people to consume more fruits and vegetables that contain potassium if they are to reduce blood pressure.



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More women in management no longer tokenism for firms

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Ideas & Debate

More women in management no longer tokenism for firms

Countries are turning to legislation on gender equality as moral persuasion can no longer be relied upon. FILE PHOTO | NMG 

Recently there was an interesting chat in a WhatsApp group of 32 young professionals. These are some good friends who were former classmates at Strathmore University. Dispersed across five countries, they are concentrated in the finance industry working in banking, audit, deal advisory, real estate, asset management, insurance, transfer pricing, development finance, energy investing and private equity.

Being peers, many topics fly in this group: careers, relationships, politics, science, religion, weddings, and of course memes.

On this day there was a topic of interest: Why are women overly under-represented on boards and in senior management?

For Kenyan firms, the situation is so appalling. Take one tier 1 bank that has 18 directors on its website and only two are women, for example. Not even the company secretary role, which many companies use for tokenism. While other tier 1 banks are not as glaring, it’s nothing close to party. This was a topic of common interest for discussion – for women and men alike.

A 2017 McKinsey study, “Delivering through diversity”, using data from more than 1,000 companies showed that those in the top quartile for gender diversity on their executive teams had a 21 per cent likelihood of outperforming their fourth-quartile industry peers on profitability. Similarly, the most ethnically diverse executive teams were 33 per cent more likely to outperform their peers on profitability.

Having more women on boards and in management is no longer a nice-to-have; it’s an economic imperative for businesses keen to improve financial performance by embracing inclusion.

While the positive correlation from these industry studies may not necessarily imply causality, there are many channels through which an inclusive leadership team enhances performance: better decision making from diverse perspectives, improved employee satisfaction, retaining female talent, and enhanced company image.

For these young professionals, there is an urgent need for bold and practical steps to achieve gender diversity at the corporate level.

In the midst of the ideas and discussions, consensus emerged on two manager-led initiatives: flexible working practices and management-led sponsor initiatives.

Many companies are seeing more women at entry level but it becomes harder and harder to get into the C-suite because of family commitments. Frank referred to cases where women are denied promotions after coming out of maternity leave because “they were not there when all the money was being made.” This is not uncommon across many professional services firms.

For Ivy she considers it fortunate that her employer, an impact investment fund, has created flexible system to support working mothers, including the flexibility to work at home on occasions.

Instead of seeing more of such initiatives, some companies are adding layers of timesheets and digital sign-ins on top of demanding face-time, even for industries where face-time is least wanted.

While this is no one flexibility model that can work for all companies, there is no doubt that companies need to get creative around flexible working practices if they are to attract and retain top female talent.

Some common practices that companies can try out include flexitime (employees have set weekly hours but can customise their schedule), schedule control (focus is on the deliverable and employees determine their schedules) and teleworking (the flexibility to work remotely while using tech to stay in touch).

For companies to embrace flexibility, practical implementation requires a strategic approach and proper transition. Even more importantly is a threshold of willingness, courage and open-mindedness by the management team, given that the economic benefits of enabling inclusion are not in question. Beyond flexible work schedules, mentorship and sponsorship have proved effective tools for women’s advancement in male-dominated fields. Simply put, mentors offer guidance and advice while sponsors create visibility and opportunity. To see more women (and men too) advance in their careers, managers at all levels need to boldly take up the role of sponsors.

Take Anne, for example. She is a forex trader and corporate dealer. Within banks, this is a role mostly occupied by men and there are industry undertones that women – and especially young women like her – are not most suitable for these high-risk roles.

Her journey is, however, one of career sponsorship. She noted that early on on her job, her direct bosses (all men) were supportive and brought her to the trading table with them. They went beyond mentorship and created space for her in a male-dominated industry.

Sponsorship takes many forms. It could be a manager taking with them younger colleagues to high-level meetings, entrusting junior team members with client presentations, a manager offering access to career networks that would otherwise not be accessible, or giving personal recommendations for young professionals applying to graduate school.

Samira, however, points outs that young women need to watch out for predatory managers posing as sponsors yet they are only interested in being “sponsors”. Sponsorship needs to be kept professional.

The Kenyan business landscape is still far from achieving gender parity despite the potential benefits that could be unlocked. According to IMF global estimates, closing the gender gap could increase GDP by an average of 35 per cent. While most of these is due to increased labour force participation, up to 20 per cent of these gains could come from the effect of gender diversity on productivity.

Increasingly, countries are turning to legislation on gender equality as moral persuasion can no longer be relied upon.

A good example is France’s recent laws that include obligations for firms to publish pay gap indicators and to provide catch–up measures where inequality exists, with penalties for non-compliance.



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Alarm over bill barring raw coffee export

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By GERALD ANDAE
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A bill seeking to bar export of raw coffee has caused jitters, with some international buyers avoiding to sign further contracts with local suppliers for fear they might not get the produce.

An official at the Nairobi Coffee Exchange says some of the overseas buyers were shying away from new agreements for clean coffee because of uncertainties over the fate of the Crops Amendment Bill by Gatundu South MP Moses Kuria.

The Bill proposes that all coffee grown in Kenya undergo processing, production and packaging locally.

“Buyers are refusing to sign orders for clean (American green) coffee as they do not know what will happen in the future, with fears that they are likely to lose out on their orders,” said an official at NCE who sought anonymity so as to speak freely.

The proposed amendment to the Crops Act says the product may only be distributed, marketed or exported in its fully processed form.

If it sails through, it will lock out international buyers and large global coffee shops like Starbucks that buy a lot of semi-processed beans.

Kenya has some of the best coffees in the world bought by traders and coffee shops for blending to get certain flavours.

Stakeholders have argued that the country loses out on originality as its brand cannot be identified in the world market given that it is used to blend others.

The legislator seeks to amend the law so that all packages processed for export be clearly and conspicuously labelled “Made in Kenya.”

The country sells over 95 percent of its coffee to the world market as local demand has remained low over the years despite campaigns to raise consumption.

Over 80 percent of the coffee produced locally is sold through the auction, with just 10 shipped out directly to the world market.

A coffee task force formed by President Uhuru Kenyatta in 2016 has proposed that the direct coffee sales be increased to enable farmers earn more from their crop.

Kirinyaga County is set to open the first ever coffee shop in New York and commence selling Kenyan coffee directly to America.





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Break the ‘woman’s role’ shackle for true empowerment

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Personal Finance

Break the ‘woman’s role’ shackle for true empowerment

Some women still endure untold disrespect from their partners. FILE PHOTO | NMG 

Most men’s ideal romantic situation is to enjoy a variety of consecutive relationships. Why can’t women today accept to share their men? Our fathers and grandfathers managed their many partnerships successfully.

No, our fathers, grandfathers, and great-grandfathers were not successful at it. They owned all the property there was to hold, and in most cultures, that included women and children. They could have a polygamous lifestyle because women had no means with which to challenge them. They beat those who tried into total submission and subservience. That was not successful management of multiple partners. It was tyranny. Without much choice, the womenfolk fell in line. It wasn’t acceptance of the situation.

The children raised in these homes watched and learned in different ways. Most of the boys wanted to be just like their fathers when they grew up – to enjoy total control; from the comfort of an array of bosoms to choose from without opposition to choice cuts of meat at the family dinner table and every privilege in-between. Most girls watched in scared, pained, and tortured silence for their mothers’ suffering and made themselves sacred promises – that; they would lead better lives than their mothers.

The reason why most women challenge polygamy is that unlike our mothers and grandmothers, we are more financially independent, we significantly contribute to or wholly fund our families. The tide has, to some extent, changed course. There are unfortunately too few of these women to provide the rest with everyday inspiration to better their circumstances. Sadly, even women who are of equal or higher means give partners money, take public transport while their husbands shuttle their young lovers around in the cars that these women work to pay. These women still endure untold disrespect from their partners, submit beatings if and when they challenge them, not to mention the possibility of disease. It is the new age version of polygamy.

It continues unabated because most of us women are yet to make the mental transition from the era of the women who raised us to the financially, socially independent persons that our world today has enabled and empowered us to become.

Young, intelligent, beautiful women with bright futures are dying in the hands of men because in no small extent; most women are yet to arrive at the opportunity that their current realities present. As women, we stand today on the shoulders of the few brave ones who sacrificed their lives and endured all manner of ridicule to pave the way to the more enabling personal and professional experiences that we can have today.

Phoebe Asiyo, Wangari Maathai, Grace Ogot, Sally Kosgei, Wambui Otieno, to name a few, cleared the path for us. It was so that we could go beyond going to school and get jobs to earn a living. It was so that we would go further to shift the paradigms that we have of ourselves and pass that forward to all the women that we raise.

To move our thinking of ourselves from that of the weak, second-class human beings whose role is largely in the kitchen with children tied to their backs to the more informed, exposed, empowered and educated (even if only to primary school level) people.

People capable of thinking of themselves as independent individuals, capable of charting their lives and future rather than appendages of others that we are socialised to revere as superior to ourselves.



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