Why Uchumi wants to expand to Nigeria, Congo and Ethiopia

Uchumi CEO Julius Kipng’etich.
Uchumi chief executive officer Julius Kipng’etich. PHOTO/FILE
Cash-strapped Uchumi Supermarkets is considering expanding to Nigeria, Democratic Republic of Congo and Ethiopia as it seeks to grow its business.

Chief executive officer Julius Kipng’etich recently told shareholders that the retailer was looking to expand beyond the region after re-organisation of its East African operations.

“Congo is a very interesting country and we could possibly extend our footprint there,” said Dr Kipng’etich.

“Nigeria’s retail industry is not as well developed and that presents opportunities.”

The retailer could also begin operations in neighbouring Ethiopia by 2018, even as it looks to re-enter Tanzania and Uganda, where it closed its money-losing businesses late last year.

Uchumi posted an after-tax loss of Sh3.4 billion in the year to June 2015 following a decline in revenue in addition to a Sh1.04 billion write-off for what the retailer said was manipulation of accounts by former management.

There was a further write-off of Sh1.6 billion after the firm closed units in Uganda and Tanzania, which are insolvent.

Uchumi is currently looking for a strategic investor to take a controlling stake in the firm in exchange for a Sh5 billion capital injection to finance its turnaround.