Turkish company Latek Logistics, trading locally as Latek Group East Africa, is set to ignite competition in the logistics and supply industry with a Sh4.92 billion ($60 million) investment in the country.
The company hopes to take advantage of the increased trade between Kenya and Turkey, with goods worth over Sh16.4 billion ($200 million) imported from Turkey last year, and the construction of the ambitious Lamu Port.
“The group proposes to set up a container freight station in the country and others regionally. Towards this end $60 million has been initially earmarked to cover the development cost of the facilities,” said the company’s chairman, Levent Erdogan. Latek’s entry into the logistics business will challenge DHL, SDV and Express Kenya who have been the main players in the logistics and supply industry.
The logistic firm will help LTK homes, owned by Latek, in importing and distributing Turkish construction materials.
LTK homes officially launched its operations in Kenya on Wednesday and will be in partnership with a local outfit, Zynmat Investments, with a Sh820 million ($10 million) investment. “A sum to the tune of some Five to Ten million US dollars will be invested in the form of inventory held in our LTK home showrooms in the country. This is so as to make our products readily available,” said Mr Erdogan.
LTK homes will be working with a pool of Turkish manufacturers to ensure a pre- and post-sale customer satisfaction, a move lauded by investors in Kenya’s real estate market.
“It’s a positive aspect as Turkish products are of quality and well priced and to have them delivered by someone who knows the manufacturers is good. Initially one had to fly out which was not economical as it was in small scale,” said Mr Peter Muraya of Suraya Properties.
Latek intends to invest Sh8.2 billion ($100 million) in the next five years in the East and Central Africa region with Kenya being its headquarters.
“We have chosen Kenya to be the natural hub and launch pad for our operations due to the country’s physical and trade connectivity,” said Mr Erdogan.
The company joins its peers from Turkey who have been setting base in Kenya aiming at the larger east African community such Eser Ltd which is in construction business, and Exen Limited.
“Latek’s investment in Kenya in an election year is a vote of confidence in the Kenyan society and its economy,” said Deputy Prime Minister Musalia Mudavadi.
The government has been tightening its ties with Turkey whose economic performance has been impressive and intends to open an embassy in Ankara.