What would you NOT do if someone was intent on trimming your primary source of income by 70%. Any sane and astute businessman would fight tooth and nail - using everything in their arsenal to wade off the attack. That is exactly what former Prime Minister Raila Odinga is doing.
In November 2016, the government announced plans to subsidize the price of gas cylinders. The plan came ever closer to fruition when the subsidy was not only gazetted - but also supplemented from KES 2.2bn to 3.1bn in this financial year.
In East Africa, Spectre International - whose majority shareholder is Raila Odinga; has been the primary manufacturer of LPG cylinders and a primary importer of related accessories - regulators, burners and such.
After the government initiative takes off, Spectre International stands to lose a huge chunk of business - considering that the Ministry of Energy opted to work with NOCK and not float an open tender (all legal BTW).
Seeing as NOCK has no experience or capacity to make LPG cylinders, it only makes sense that NOCK will attempt to strike a deal with Spectre to get cylinders at heavily subsidized prices; or, if that fails - as it is most likely to do - get a better deal from an alternative provider.
Either way, Spectre loses… and therein lies the problem.
When Senegal’s cylinder subsidy programme was introduced to curb deforestation, the per capita consumption of LPG increased threefold. Today, about 86% of Senegalese use LPG.
Kenya has a dismal 23.4% urban LPG consumption and a much lower figure of only 1.8% in rural areas. (Dalberg report of 2013).
Converting even a small section of the “unconverted” would definitely generate quite a handsome chunk of change!
Sounds to me like Spectre is getting a stimulus rather than being curtailed. Even if not directly it looks like a huge opportunity for Spectre to exploit.
Spectre International only revalidate old cylinders .All cylinders are supposed to be revalidated after 8 years . They do not manufacture new ones. They also are not in the business of manufacturing LPG accessories.
If anything the subsidy would only increase their business in future.
The last mass production done by Spectre was during Trition when they launched “Wanjiku”. It doesn’t have any significant input in the Lpg, in fact most OMCs import their cylinders from India.
Spectre international has been fighting bankruptcy and survival for the last 10 years. Its poorly ran and managed. Most of LPG cylinders are directly made and maintained by the petroleum companies here. Its only independent refillers who consider them.
you are talking out of ignorance. the tender to supply both cylinders and burners was floated early this year. those who wanted to do business with the government did so. it was reserved for the youth. sa ii ndo mnaongea but its already late.