Day 32: Today rest day. Just enjoy the pictures!

Meeting an Ivey grad at the Tiwi

More Tiwi Beach

Day 31: No much to say about today… more reading and more sunbathing. The only highlight of the day was given by the dinner at "Chez Martin" a very popular local dining place! We were approached on the beach by one of the “beach boys” that sell all sort of things and we were persuaded to have a fish bbq on the beach. After negotiating the price down we agreed to have fish and prawns for a steep 400 Ksh ahead. When we later went to look for our dinner by the beach we found Martin cooking in remote spot of the beach inside a cave! We had barracuda which tasted nice but I don’t think it was the most hygienic meal since there were flies everywhere and more than once he kicked sand onto to the food! Oh well we had to try a real beach cooked meal in Kenya!

Day 30: Today I completely relaxed by the beach, moving from the porch to the beach to the bar. Reading, sleeping, sunbathing and drinking beers on the magnificent beach of Tiwi!
I love Tiwi because it’s not been developed like the rest of the coast, the beach is 3.5 km from the road and therefore there are very few people and more importantly no traffic. Most of the Kenyan coast is full of big resorts so it was nice to find this little corner of paradise. The pictures speak for themselves (compare the one from the resort to the one on the side of the txt). I have started reading a great book called “End of Poverty” by Jeffrey Sachs, who is special advisor to secretary general Kofi Anan. I shall tell more about the book later on once a made some progress.

Day 29: Today was public holiday in Kenya and also was the beginning of my long week end. The rest of the team returned to Nairobi while a made my way to Tiwi beach just 20 km south of Mombasa. Neil and Rafal will join me tomorrow. I found Tiwi beach on the Lonely Planet. On Tiwi I managed to find a nice cottage in an undeveloped stretch of the coast. Instead of taking a cab from Mombasa I decided to use the local form of transport called matatu. A matatu is basically a mini van that has been modified to take 14 passengers is very economical but you are squeezed like a sardine and the drivers are all lunatics that drive like crazy. The journey was a little sketchy, and I felt very “white”. Especially when the matatu broke down and people where talking “loudly” to the driver and I was just sitting there at the back of the matatu looking totally lost because there were speaking in swahili! I had no clue where I was or what was going on, people started walking away from the vehicle the driver called them back and then all of sudden the van re-started and off we went! God knows what happened … I will never know.
In the evening I met Reham, Irfan’s brother. I met him at the hotel where is working (Pleasure Lodge) a beautiful resort with its own 18 holes golf court. We had a quick beer at the bar and then we headed out to a really nice bar by the beach called 40 Thieves. We had several drinks and talked about Kenya, Canada, football and other various “topics”. Ended up getting drunk but it was a really good night and it was nice to finally meet Irfan’s brother after having heard so many stories about him!

Day 28: Today we visited one of the biggest butchers in Mombasa: Magram Butchery Ltd. Magram has been one of the biggest beef dealers for the last 25 years he supplies most of the major hotels on the coast. It was very interesting to talk to this business man because he highlighted some of the issues surrounding the livestock industry. But more interesting was to find out that the business problems affecting entrepreneur in Kenya are the same as in develop countries if not worse. For instance Mr Magram pointed out that the big hotels use supplier’s capitals to finance their operations. He was pointing out that 60 even 90 days credit is not a problem but on the coast of Kenya the big resort flex their muscles and pay when they feel like. On the other hand Magram has been keeping its payments to LIME and he always pays on the due date. Mr Magram also operates a ranch, not out of choice but out of necessity. Approximately 10 years ago the government the biggest ranch in Kenya was acquired by the government at that point operations started to deteriorate. Magram was buying all the cattle from that ranch so he was forced to start his own ranch by leasing some land. Ranching is a very important in Kenya because most of the cattle come from semi arid regions and therefore they need to be conditioned and fattened before they can be slaughtered. This can only be done where pastures are available. A cattle can be bought for 30 Ksh per kg at Garissa and sold at the terminal market for 75 Ksh. This spread has to take into account traders margins, transport, conditioning and rancher margins. This is a very cut throat industry at the end of the day cattle are commodities and even though we haven’t carried out a full PEST analysis barrier to entry seems very low. I guess this is enough cattle trading background for one day. I like this assignment because it allows me to put into practice all that I have learnt in my first year of business school. The real life though is always more complicated than the case we had to do at Ivey!While in Mombasa we visited the old town and for Jesus an old Portuguese fort built by an Italian architect I think in the 15th century! We also walked around the old town with its narrow streets and its Arabic influence.

Day 27: Today we travelled to Mombasa, the journey was long and unpleasant it took as approximately 7 hours. The road has been partly renovated but not entirely so for a couple of hours we travelled on a surface full of pot holes the size of small craters. The state of the road is a consequence/ reason why Kenya is such a poor country. The Nairobi to Mombasa route is the main artery of the country, it connects the capital to the world, through the Mombasa port. Transports cost must be exorbitant because of the state of the road and therefore it doesn’t not make business sense to invest in manufacturing in the capital, where cheap labour is abundant. On the other hand because of lack of revenues from tax the government cannot afford to repair/upgrade this route which in turn causes a vicious spiral of poverty! Another striking fact is the little number of lorries travelling on this route. For a major route this can only be indicating that there aren’t many goods to be transported because there isn’t need for raw materials from the port and no finished goods to send out!
Once we arrived in Mombasa we went to our hotel which in one of the resorts north of Mombasa. Here the landscape is that of a brochures that can be found in any travel agents in Europe. Hotels on the coast side of the road, jam packed next to each other. Mombasa must be one of the main tax revenue for the government; all the prices are adjusted to take into account the financial possibilities of the tourists. The Kenyan can barely afford those rates. Everything is inflated from beer to exchange rate. Just for comparison, in Nairobi 1 $US gets you 70 Ksh in Mombasa it only gets you 62 Ksh.
Nevertheless the hotel was beautiful with a great ocean/pool view, but it is too developed for my liking, the beach disappears with high tide because they have squeezed the hotel’s pool too close to it, so close that they had to build a sea defence made of concrete.

Day 26: Not much to report from the cultural side, since today I spent the day working on numbers for LIME. The work is going well we are covering a lot of ground; we have started making sense of all the numbers and data we have collected. We have a much better picture of the industry and the various players. We still need to talk to some other players in the industry but this will only confirm some of the information we already have in hand. Is becoming clearer and clear that trader do make money, but also it is clear that the market is totally erratic. The main factors influencing price are rainfall, ceremonies for the various tribes, and expenses that the pastoralists have to sustain such as school fees. Basically pastoralists will sell their cattle when they have to pay for school fees or to celebrate weddings, or when there is no rain and the cattle is at risk of dying. Therefore pastoralists tend to sell the cattle all the same time which causes prices to drop and they make very little money out of it. Furthermore pastoralists see the cattle as status symbol and the more they have the better it is. Unfortunately this causes overgrazing and bad husbandry practices because they do not have enough resources to look after all the cattle. I guess these people need to be educated and this is certainly one of the things that LIME could do, since it would improve the quality of the goods that LIME buys, and therefore in the long run it could fetch higher prices.