- The future of Dutch-Kenyan relations is bright, and family-owned businesses are at the heart of this continued success.
- Through the Netherlands Business Hub, deeper relations can be fostered by connecting businesses from both countries.
Image: PCS
On April 27, 2024, we celebrate King Willem-Alexander's birthday. King's Day is more than just a party. It is a day of celebrating Dutch culture and community. This year, we also celebrate 60 years of diplomatic relations.
Our relations go back further: Dutch individuals, associations, churches, institutions and, in particular, businesses have long ties with their Kenyan counterparts. What is it that explains the depth of the economic relationship between our two countries?
Often, the personal interest of traders and investors who wanted to explore possibilities in Kenya drove bilateral economic relations, coupled with Kenya’s hospitality to foreign countries in a market-oriented economy. Those personal ties are typical for family-owned businesses (FOBs).
Many companies in the Netherlands are of small and medium size and have expanded with family capital, private equity capital and bank financing. Only a minority of Dutch SMEs are shareholder companies.
FOBs form the core of small- and medium-sized companies, and together they form a rich tradition in the Netherlands. They are built on generations of experience and play a significant role on the international stage and in fostering bilateral trade and investment.
Currently, over 100 Dutch companies operate in Kenya, and data shows that a significant portion (60 per cent) of Dutch FOBs operate internationally. To understand this, one must realise that the Netherlands is a small country – its market size has always been limited and for businesses to foster, thus, diversifying to international markets was essential. Research shows that Dutch FOBs that internationalise operations outperform their domestic counterparts, with more profits and better scalability.
The Netherlands is a hub, a gateway into Europe with a very strong international character. Similarly, Kenya as the regional hub is a gateway for Dutch companies who wish to expand into East Africa. This link explains why the Netherlands is not only one of the biggest trading partners of Kenya, but also among the top five foreign investors. De Heus, Heineken and Royal Dutch Flower Group are a few examples of Dutch family-owned businesses that successfully operate in Kenya.
Image: HANDOUT
The social responsibility focus by FOBs originates in their family character: not short-term profit objectives, but longer-term, strategic goals including a desire to make a difference. Compared to shareholder companies pressured by quarterly results, FOBs see businesses as a facility to create value and not as an asset with value on the market.
A recent report by PricewaterhouseCoopers confirms that FOBs show resilience by anchoring themselves well in their host communities and take their interests at heart. During Covid, for instance, employment with FOBs rose, whereas employment contracted considerably in other companies.
FOBs also show capacity to innovate, thus able to grow and respond to changing demands of clients. With younger generations at the helm, FOBs are becoming more eager to reduce their environmental impact. These long-term inspirations translate into strategic focus on building stable partnerships with all stakeholders, contributing to the companies’ long-term success, and society's well-being.
Kenyan family-owned businesses are a driving force in the nation’s economy. Their deep local knowledge allows them to tailor products and services effectively, while their flexible structures enable quick adaptation to changing markets. However, challenges like succession planning and access to capital hinder growth. Despite these hurdles, Kenyan FOBs remain a vital part of the country's economic success story.
The investment climate contributes to positioning Kenya as a premier investment destination. To unlock its full potential as a global investment hub, the business environment should foster investor confidence. This means prioritising stability, efficient regulations, predictable policy and transparency.
The future of Dutch-Kenyan relations is bright, and family-owned businesses are at the heart of this continued success. Through the Netherlands Business Hub, deeper relations can be fostered by connecting businesses from both countries. Therefore, in the future, the Dutch community can be more active in Kenya and will celebrate many returns of King’s Day. Happy King’s Day to all our close friends in Kenya!
Ambassador of the Kingdom of the Netherlands to Kenya. [email protected]