Volvo Trucks of Sweden on Thursday announced its interest in setting up base in Kenya for their operations in East Africa.
The company will set up a $25 million ( Sh2.58 billion ) assembly plant in Mombasa in partnership with NECST Motors in the first quarter of 2018.
The assembly plant will have an annual production capacity of 4,500 units and will create approximately 300 direct jobs, in addition to other indirect employment opportunities.
“Preparations for the assembly plant in Mombasa are under way. We expect to have something coming out by the first quarter of 2018. Direct Investments into the plant will cost about $25 million,” Volvo Trucks East Africa director, Micke Rydbeck said in Nairobi yesterday.
“Going forward, our focus will be on not only gaining new market shares but also raising the overall standard of customer satisfaction by expanding the after-sales network, training our staff and ensuring the availability of genuine Volvo parts,” NECST co-founder and chairman Erik Eberhardson said.
Presiding over the signing of the deal, Kenya Investment Authority managing director Moses Ikiara lauded the partnership saying “it complements the Government’s effort to expand the manufacturing sector.” He said that although the SGR is expected to cut transport costs by 40 per cent, there will be enough business for everyone.
“We should not see the railway as direct competition, what we are looking at is the last mile. The railway can only transport goods from one point to another but the goods still need to reach the customer and that is where we see an opportunity,” Volvo Trucks president Claes Nilsson.
The government has scrapped the excise tax on locally assembled cars and motorcycles in a bid to spur local assembling and manufacturing.German manufacturer Volkswagen began assembling cars in Thika last year while India’s Ashok Leyland is also planning to set up an assembly plant in the country.
