Treasury concludes 40pc acquisition of De La Rue

The government has paid £5 million (Sh663.3 million) to acquire a 40 percent of currency printing firm De la Rue.

This marks the end of an eight year process to sign a joint venture agreement with the British currency and security printer.

According to the Treasury Cabinet Secretary Henry Rotich, the joint venture had delayed due to concerns on the original structure of the transaction that had a contentious exclusive printing clause that would have bound the government to a 10 year currency printing deal.

“The reason the transaction has taken long is because the government needed to address public concerns that arose during the process. These included concerns were raised by the Public Accounts Committee of Parliament and other Kenyans,” said Mr Rotich.

De la Rue Group Chief Executive Officer Martin Sutherland said they will use the partnership with the Kenyan government to source new printing deals in the region.

“Our factory here in Nairobi will become one of De La Rue’s three global Centers of Excellence, and see a share of the 15 million pounds of investment we are making in new equipment across those sites,” said Mr Sutherland.

The deal is however bound to raise eyebrows given that it comes at a time when the country is just about to introduce new generation currency notes.

Contracts for currency printing have over the years been engulfed in controversy, and the one for the new notes may not be different. However Treasury was quick to hint that such contracts will be subjected to competitive bidding as provided for by the law.

“Business can come to any business, any public entity will just follow the normal procurement and if the company bid for it that’s open this company is also allowed to bid if they win fine if they lose again that’s it,” Mr Rotich insisted.

The government will get two board seats in the Kenyan unit and will be able to dictate strategic decisions.

Dividend earnings, employment and foreign exchange inflows are among the benefits the government says will be derived from the deal.

The Kenyan facility which employs 290 people will be producing for both the domestic and export markets. The plant will produce one billion banknotes every year with a potential to boost production output by 50 percent once new equipment is installed.

The Ruaraka based factory will equally become one of the three manufacturing centers for banknotes and security printing identified as part of the group’s recent footprint review.

De La Rue Kenya will use the new partnership with government to angle for new currency printing businesses in the region.

Additional reporting by Patrick Igunza