Profit shy Nakumatt to open more outlets

Despite failing to make a profit in the first year of operation Nakumatt, a Kenyan departmental store has reported that it managed to register a cash break in its first year of operation in Rwanda. The Country Managing Director, Adan Ramata, said on Monday in an exclusive interview with Business Times that the company’s Rwandan unit has been focusing on improving the store with expectations of registering profit in the near future.  
Nakumatt store in Kigali. (File photo)
Nakumatt store in Kigali. (File photo)

Despite failing to make a profit in the first year of operation Nakumatt, a Kenyan departmental store has reported that it managed to register a cash break in its first year of operation in Rwanda.

The Country Managing Director, Adan Ramata, said on Monday in an exclusive interview with Business Times that the company’s Rwandan unit has been focusing on improving the store with expectations of registering profit in the near future.  

“With a new business you can’t easily make profits in your first year of operation, the income earned was re-invested to improve the business and we hope to start registering profits in our third year of operation,” Ramata explained. 

He also added that within their first year of operation, the company is already happy with the Rwandan market that has responded well to its 24-hr shopping system.  

“We had to first set-up a fine system, expanding our operations and having a well trained staff was still on our top agenda,” Ramata added.

Talking about the recent stand-off between management and employees Ramata explained that there was a miscommunication between the employees and the media and that the disputes have been settled.

“There was a transition of management at the time employees were organising a strike, they were demanding for a salary increment, medical insurance and Ids.

These complaints were raised on the September 1, 2009 yet I started work on September 15, so salaries were not supposed to be ready in two weeks,”

“In the following month (October), salaries were increased, cards, medical insurance offered by SORAS were all given to the employees, fulfilling their demands,” Ramata explained.

Nakumatt Rwanda is in negotiations with its parent company, Nakumatt Holding Ltd, for a possibility of opening up new outlets at Gacuriro and Nyarutarama in Kigali city.

The new outlets are expected to be operational before the year ends, hoping to create more jobs.

Currently, the company runs only one supermarket in Rwanda located at the Union Trade Centre (UTC).

Atul Shah, Managing Director of Nakumatt Ltd recently said that Rwanda is a fast growing country with political stability which is pull factor for any discerning investor.

The Kenyan based chain-store opened shop in Kigali last year, promising to invest a tune of $7m (Rwf3.9b) in a world class supermarket.

However, according to the current Managing Director, the company has managed to invest a fraction of $1.8m (Rwf1b) to acquire a local supermarket while $1.3m (Rwf736m) has been rolled out in improving the store.

Ramata said that they are anticipating more competition to come in the next years and that right now they are very comfortable and they like the way SIMBA supermarket is doing.

“We welcome any competitor who can bring in any challenge, this will make us improve and make us better and competition is always health,” he explained.

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