Ascent acquires leading manufacturer of construction materials

Ascent acquires leading manufacturer of construction materials

 

From left to right: Surendra Budhia – CEO Metro Concepts East Africa, Voona Rao – Executive Director Metro Concepts East Africa, HD Shah – CEO Metro Plastics Kenya and David Owino – Partner, Ascent Capital Partners LLP looks through construction equipment at Metro Plastics Kenya after the deal signing that led to Ascent Capital’s full acquisition of the company.

 

 

 

 

Ascent Rift Valley Fund (ARVF), a leading SME Private Equity Fund investor has increased its investment presence in Kenya through the acquisition of Metro Plastics Kenya Limited, a leading manufacturer of PVC and PPR water pipes, electrical conduits, waste pipes, fittings and gutters.

The investment was done through an asset carve-out into a new entity called Metro Concepts East Africa Limited. Ascent has previously invested in Auto Springs East Africa based in Limuru and Kisumu Concrete Products, a leading Western Kenya-based concrete products maker.

The Private Equity Fund is positioning itself for increased activity in the real estate and construction sectors.

These sectors are expected to pick up again buoyed by the government’s push for affordable housing

as part of its big four agenda, and following the repeal of the law on interest rates cap.

Ascent has previously invested in Kisumu Concrete Products, a leading construction materials manufacturing plant, producing construction aggregates, concrete blocks, tiles and other concrete pre-cast items in western Kenya.

Metro Plastics Kenya has been in operation since 1983 where it has been a market leader in the fittings

space and pipes segment. The company based in Nairobi’s Industrial Area employs over 300 people.

Speaking during the signing of the deal, Mr. David Owino, Partner at Ascent Capital Advisory Services LLP

said that their investment will focus on expanding the range of products manufactured by Metro

Concepts East Africa as well as expanding its presence in the region.

Previously, the company has mainly operated from Kenya with sales offices in Uganda and Rwanda.

“This is a leading player in the Kenyan market with over 30 years’ experience. The company has a strong

brand name that is recognized by customers in the region because of its quality products” He said.

Mr. Owino said that among the key value addition areas for the fund are product development, introduction of improved manufacturing practices and technology and implementation of Environmental, Social and Corporate governance (ESG) standards to measure the ethical impact and sustainability of the business.

“We strongly believe that most achievements are derived from employee productivity gains, and as such we are committed to investing in the employees. This should see better quality products availed at affordable pricing to customers.” He added.

He said that the investment will have a huge impact on not only the real estate and construction sectors,

but the economy as whole.

This is informed by plans to expand the company’s product offering thus reducing the need to import and thereby increasing employment opportunities.

The manufacturing sector is a key driver of Kenya’s economic development in terms of job creation,

national output and exports as indicated by its huge role in Vision 2030.

 

The sector’s overall goal in the Vision 2030’s midterm plan is to increase its contribution to GDP by at least 10 percent per annum.

This deal is Ascent Rift Valley Fund’s third investment in Kenya having invested previously in Kisumu Concrete Products and Auto Springs EA Ltd, a motor assembly and vehicle spare parts maker.

The fund has also made 3 investments each in Uganda and Ethiopia.

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