Manufacturer and distributor of hygiene, tissue, and home care products Kim-Fay East Africa has raised debt funding from Norwegian Investment Fund for developing countries (Norfund) and I&M Bank, to expand its regional operations.
The investment from Norfund and I&M Bank will support Kim-Fay's business expansion, focusing on providing affordable tissue paper to lower-income market segments.
Debt funding, also known as debt financing, is raising capital by borrowing money that must be repaid over time, typically with interest.
With advisory support from I&M Burbidge Capital Limited (IMBC) the funds will go towards constructing a new recycled paper manufacturing facility in Tatu City, Ruiru, using locally sourced wastepaper, expected to be operational by 2025.
“We are pleased to have advised Kim-Fay on its debt capital raise and we are delighted to have managed the process to secure high-profile, long-term financing partners for their backward integration tissue manufacturing facility,” said I&M Burbidge Capital, Chief Executive Officer Edward Burbidge.
In 2015 the Consumer products manufacturer broke ground for a development of a Sh2.5 billion plant and corporate headquarters in Tatu City.
The investment comes at a time that the country is recording a growing demand for tissue and hygiene products as consumers become more hygiene-conscious and the middle classes expand.
According to Euromonitor International, in 2023, high inflation drove consumers towards cheaper tissue and hygiene brands.
Competition has therefore intensified between manufacturers and importers of tissue and hygiene products, resulting in drastically reduced prices.
Norfund, East Africa director William Nyaoke said that the project aligns with Norfund’s mandate to support sustainable enterprises, create job opportunities, and improve lives in developing economies.
“We are excited about this partnership with I&M Bank to finance Kim-Fay’s expansion and development of a state-of-the-art wastepaper recycling facility at Tatu City,” said Nyaoke.
The company currently operates in in Kenya, Uganda, Tanzania, and Rwanda. With products range includes baby care, feminine hygiene, and personal care products.