Extensive opportunities for Siginon, but imports slow this year

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Kenyan cargo handler Siginon Aviation believes there are plenty of future opportunities for it as Kenya and Nairobi ‘s airfreight market continues to grow.

Siginon handles for Qatar Airways Cargo, Cargolux, Singapore Airlines Cargo, CargoLogicAir and others at Nairobi’s Jomo Kenyatta International Airport (NBO).

Imports manager, Jared Oswago (pictured below) says Kenya is the regional economic powerhouse and Nairobi is becoming a financial and commercial hub for East Africa and the planned construction of a second runway at NBO will cement its position in the region.

He explains: “This presents big opportunities for the aviation industry to provide necessary linkage and support for business. The Kenya government continues to invest in aviation infrastructure within the country including construction of new airports in various parts of the country including Kisumu and Isiolo airports, which will increase opportunities for trade.

“The impending direct flights between Kenya and US operating from NBO will present an opportunity for Siginon Aviation to boost its cargo volumes and airline clients it handles.”

However, he says the aviation industry in Kenya faces serious challenges arising from insecurity as Kenya, due to its position, has endured security threats from Somalia.

Oswago says: “This increases the cost of doing business through additional security investments to ensure cargo safety and security. In NBO, there is over investment in cargo handling facilities, which poses a challenge as airlines are spoilt for choice.

“This has driven the rates down and reduced incomes. As a result some ground handlers are facing challenges in purchase of new handling equipment that are required to sustain quality service provision.”

In 2017, import cargo volumes have been lower than expected for Siginon, Oswago notes. This he attributes to the general slowdown in Kenya’s economic performance as 2017 is an election year, although exports continue to record a good and steady performance.

He says a lot of importers tend to wait and see the climate pending the outcome of the election and anticipates business will go up once the election is finalised and contribute to increased business towards the end of year.

Oswago says there has been a rise in perishables (fruit) and motor vehicle imports while exports remain steady in all sectors.

He reveals Siginon is in discussion with several regional and international airlines and is upbeat it will sign contracts soon and welcome new clients into its state-of-the-art cargo terminal.

The Special Economic Zones (SEZ) that came into affect in Kenya this year are also set to boost trade and airfreight. Oswago says the SEZ act has been signed into law and started in various parts of the country including Nairobi and Mombasa. “The impact is anticipated to be positive and shall be determined once the program substantively picks up,” he explains.

He says the handler is also eyeing further investments: “There are opportunities for investments in Kenya and Nairobi and we are definitely looking to take them up. There are particularly great opportunities in perishable handling.”

Siginon has drawn-up plans to develop its state-of-the-art $10 million NBO facility spread over 5,000 square metres, but Oswago says expansion will be guided by customer demand: “We continue to have our ear to the ground to ensure we provide services that meet our customer needs. Siginon Aviation air cargo terminal was built with sufficient expansion provision to keep in tandem with dynamics in the market and the customer.”

In 2016, Siginon handled about 50,000 tonnes of cargo of which about 40,000 were exports and 80-90 per cent perishables.