i, ·- - - -·-- SESSIONAL PAPER D.ifO;T@· iQF· 1969 C.lN I ..... ,_~~ --=-":':"~~. i l GOVER.Nl.IENT GUARAJ\T~E~Fo'R ·A:LOAIIT FRmiT "1 ___ ~ THE EAST AFRICAli DEV~'fJ8Plt~;.NT 'BANJ 'to··'1TEtK ___________ c._~j INIJU S TRii1.L CC.RPO RATION In accordance with the Loans (Guarantee) Jlct 9 the Minister for Co11rn.erce and Industry has given :notice of the fol.lowing motion: - THAT, this House 2,JJJJI'oves the _proposal by the Government to guarantee 1:1 loan from the East Ai'rican Development Ba.n...1<: to the Ino.ustri2.l and Commercial Development ' Corpor2.tion of n, sum not exceeding K£260 1 000 paya"ole over a period of 12 years including 4 years of grace and carrying a rate of interest of 8% per a,nnum :payable half yearly plus a commitment fee of 1% per annwn on funds not disbursed :rn contained in Sessional Pa.per No.10 of 1969 already laicl on the Table of the House. • (President 1 s consent signified) 2, The Industrial and Commercial Developr..1ent Corpor2,tion, an autonomous body wholly ovmed by the Government, has negotiated 2, line of credit of K£260,000 from the East African Develop:oent Bank. This credit is required to finance tho eq_uity portion of the I.C.D~C. in respect of 6 large scale industrial projects, being jointly sponsored by I.C.D.C. and foreign industrialists. These projects are Hoechst East Jdrica Ltd. ( synthetic resins), Kenya Industrial Plastics (plastic tablerrares, toilet seats, stool, etc.), Kenya Engineering Industries I1td. (locks, pad locks, matchets and - 2 .... shovels) 1 Cersmics Ind.ustriec of East Africa Ltd. (,·"rockery, glazed wall tiles 7 mosa.ic tile i low tension electrical porcelain 1 etc.), Heshima Ca.rpets (carpets and rugs) and the expansion of' the Thika Factory of Nletal Box Company of East 11.frica. (AcLrli tional details attached). 3- This credit which is repayaole ov-e?: a period of 12 years, including 4 years of grace, 02.rries a rate of interest of 8% per annum. The interest will be paid half yearly, the first instalmen.t to be paid six months o.fter the first disbursement. The I.C-.D.C. sha.11 also po;;,r a cofilIJ.i tuent fee of 1% per snnum. Before this 100.n is formally disbursed to the I. C. D. C. 1 the East African Development Bank needs a gua.rantee from the Government. 4. The Industrial 0,nd Commercial Development Corporation was incorporated in 1954- in :pursuance of the Industrial ])evelopment Act, The I. C .IJ. C. is concerned vii th the industrial and coramercial deve-- lopfoent of Kenys, by the ini tiation 9 assistance, or expansion of industrial, commercial or other undert:Jlzings or enterprises. Apart from. rendering consultancy 3nd extension services, particularly in the field of management practices, cost accountancy, oook~kee:ring, etc., the Corporation provides credit facilities to small Afric2n commercia,l and industrial enterprises for short periods for working capital and on long term basis for machinery and equipment. 5. In keeping with its objectives of promoting the industrial development of the country and integrating Africans into the industrial and cm:ru:1erci2,l sectors of the economy, the Corporation promotes joint industrial ventures with foreign investors and nhere necessary holds shares j_n such ventures; it being understood that :part if not all of the LC .:0. C. shares are held in trust for /--;:_ - 3 - Africans. Through this poli(JY, the GovernNent ensures that the country bonefi ts from moderrt technology and mEmagernent and adninistrative expertise of the foreign industrialists. 6. To discha.rge its mul tifaribu:3 oblig2.tions, the Corpora.tion has a capital of K.£,3.1 willion (as c,t 30th June, 1969L out of which its overall investment in shareholding and loans have bean financed. Of this total caIJi ta.l, the Corporation ha.d investoa K£2.9 million as at 3~th June, 1969, on different fields of activities as follows:- INVE s TJl/amT FIELD INv'I'JSTJ:.IENT AS AT 30/6/69 K£ (i) Shareholdings 897,400 (ii) Large & Medium sized Loans 565,100 (iii) Small scale industries promotion (snall loans and KEmya, Industrial Esta-to Ltd.) 508,800 (iv) Comr;iercial Loe,ns 579,000 (v) Other Invest@ents (Property Loans & Share-Purchase Loans) Total K£2,900, 300 7. From the above, it would bo observed that the Corporation he,s struck a heal thy be.lance in th2 2,lloc2:tion of resources to small enterprises and large-scale ventures. However, the I.C.D.C. Board of Ilirectors havo approved a number of joint venture industrial projects between I.C.Il.C. and foreign industriQlists. It is for impler.ienta.tion of these projects that I. C .D. C. informally approached the East African Ilevelopment B,7 ..n k for loan assistance. APPENDIX TO SESSIONAL PAPER N0.10 SOME VITAL STATISTICS RELATING TO 6 PROJECTS Name of the Items to be Total Equity Cauital: ~m1i:i"l10yt?iie:mi_~ -~ .. --- Annual Profita- Project: Manufactured: Investment: Production bility Total ICDC'S Direct Indirect Total at full Share Produc- tion % K£ K£ K£ NOS. NOS. NOS. K£ (Net profit X 100) In ves trr '-'l l. Hoechst Synthetic 2431750 107,150 32,000 20 20 4o 211,650 12.3 . E.A. Ltd; Resins 2. Kenya Plastic Table- 49,000 151000 5,000 10 10 20 70,900 34.5 Industrial wares; Ash- Plastics trays; Toilet Ltd: Seats; and Stools \. Kenya Locks; Pad 345,950 200~000 1001000 160 240 400 469~350 26.0 Engineering Locks; · Industries Matchets; and Ltd: Shovels: 4. Ceramics Crockery; 150,000 100,000 20,000 80 120 200 173,775 24.o Industries Glazed Wall of E.A. Ltd: Tiles; Mosaic Tiles-; Low Tension ~ · Eleotri,•al Porcelain etc. Sub-total c/f 788,700 422,150 157,000 270 390 660 925,675 ...; ·. .. ;~ . ·•···· - 2 - Sub-total b/f 788,700 422,i50 ]_57 ,ooo 270 390 660 9251675 5. Heshirna .Garpets & Pugs: l20 1 000 85,000 25,500 60 90 l50 l77 1 500 9.3 Carpets: 6. Expan,si on of Metal containers; li295,000 750,000 75,000 50* 100* 150* 1,5211000 10.4 Metal Box Co, Printed metal I of East Africa: I containers; and Plastic domestic j appliances i I Gross total 21203,700 l,257~l50 257,500 380 580 960 f21624,175 14.5 * This refers to additional employment resulting from expansion of the factory,