On September 15th Cummins and Car and General(C&G) signed the final agreements for the formation of a 50:50, joint venture partnership to consolidate the sales, service and support of Cummins products in East Africa.
The 50:50 joint venture company will operate under the name of Cummins C&G Holdings Limited. Subject to certain regulatory and procedural approvals, the new joint venture will begin operations in early 2017.
The joint venture will take over the full-line distributor business from C&G, Cummins’ current distributor in East Africa. The territory comprises 11 countries namely Kenya, Tanzania, Uganda, Ethiopia, Djibouti, Seychelles, South Sudan, Rwanda, Somalia, Eritrea and Burundi.
Car & General secured its first Cummins distribution agreement in 2006 and reached -$30M in regional revenues in 2015.
Commenting on the partnership, Gino Butera, MD and VP Cummins Africa said, “We are excited to partner with C&G.
Over the past 10 years, they have grown the Cummins distribution business in East Africa, gaining over 15% market share in the genset market in Kenya, Tanzania and Uganda.
We see untapped growth opportunities in East Africa and are looking forward to expanding Cummins’ customer support in the region”, said Butera.
East Africa, one of the fastest growing regions in the world with an expected aggregate GDP growth rate of -6% over the next five years, represents a strategic region for Cummins in Africa.
“We strongly believe that with our brand strength and C&G’s market knowledge and relationships, we can grow our business by improving our service and support and pushing resources closer to our local and global customers in East Africa”, said Butera.
“We view this joint venture partnership as a critical milestone in the close business relationship we have developed with Cummins over the years.
We believe our core business and community values are aligned, and see this partnership as a unique opportunity to solidify market leadership in our existing territories and capture market share where we are still building our presence.
This new partnership is truly a win-win proposition – for Cummins, for us and for our customers” said Vijay Gidoomal, MD of Car and General.
