Over the last two weeks, I made it my duty to study and write about the changes unfolding at the two pioneering local firms recently listed at the Rwanda Stock Exchange (RSE). I first looked at how Bralirwa Ltd- the first local company to list at RSE- managed to file its first-half year results for the first time.
That alone suggested that transparency and increased accountability, courtesy of its listing at RSE, subjected the company to higher levels of efficiency and openness than ever before.
Then just before the end of the week, I studied a fairly detailed report by a leading investment bank, Renaissance Capital on the financial health of Bank of Kigali (BK) and its valuation following its Initial Public Offer (IPO) undertaken in September 2011. A look at both companies today vis-à-vis their state prior to the listing demonstrates a few home truths.
Firstly, both companies have been transformed virtually overnight. Secondly, they present a compelling example of why policymakers need to fast-track the government’s divestiture programme.
Last week, I interviewed the Managing Director of Bralirwa Sven Piederiet, on the performance of his company and how the country’s beverages industry is likely to play out in the coming days. That Bralirwa was voted as the best Heineken Unit in Africa was a shocker to many. Based on metrics, it was hard to imagine a Rwandan company achieving such a feat given the context of the country’s industrial capacity.
However, according to Piederiet, this was as a result of relentless pursuit of top notch quality assurance by the brewer’s top management. He says that when it comes to scooping quality assurance awards within the regional beer industry, Bralirwa does better than regional brewer, East African Breweries (EABL) since the former through its parent company, Heineken, is much larger, older, more experienced and certainly a more muscled competitor.
Sven further points out that it was not by a stroke of luck that Bralirwa is one of the best Coca Cola bottling units in Africa. For two multi-nationals, both global brands- one European (Heineken) the other American (Coca Cola) to shower an East African subsidiary in Rwanda with such envious accolades is not by accident.
Over the course of the last few years, Bralirwa has drastically changed. Its operations as a dominant monopolistic player of yester-years, has since paved way to a more agile player.
Such a radical shift represents the development currently witnessed by the country’s industrial sector. The sector is moving from the complacency of yester-years to the agility of the today, based on increased speed and added urgency of the future.
On the other hand, Renaissance Capital’s report on BK revealed the drastic changes within Rwanda’s largest bank. Those who bought BK stocks must be relishing the decision they made. The value of BK shares has since surged by Rwf 11 from Rwf 125 prior to the listing to Rwf 136 by the day’s trading yesterday.
That is by any measure a very huge gain. BK’s operations and by extension its valuation that is approximated at US$151.2 million by Renaissance Capital right now, up from US$104.3 million prior to its debut at RSE, now compares favourably with its peers in East Africa.
The context that such local companies found themselves in some 17 years ago compared to their peers in the region was dire. Other firms within the bloc never experienced the kind of harsh situation BK and Bralirwa found themselves some time back. For such companies to compare favourably with their peers in the region is a milestone.
The story is that yes, it is possible to use the resilience of local firms to up the ante and rise up to be counted in the continent in line with an African renaissance.
The author is an editor with The New Times