Kenya is undersupplied with quality warehousing property. According to a warehousing survey done by Tilisi properties, 63 per cent of businesses have experienced delays as a result of the current warehousing shortage.
Respondents in the report said that the inadequacies had generated delays for them in meeting their customer demands. The survey was done across five sectors including manufacturing, pharmaceuticals, logistics, retail and horticulture which form the bulk of warehousing consumption.
Of all the sectors surveyed, only the horticulture sector planned 100% of its storage based on current needs, used its own space for extra storage as it searched for new options, and reporting zero product impact from warehouse shortages and searches.
In agriculture, overall, however, inadequate storage has been cited as the cause of considerable losses, where management was not sufficient.
Last year, Kenya exported flowers worth Sh. 113.3billion, yet research has shown that poor cold-chain management sees about 20% of the value of flowers wasted, equating to a loss of $100m (Sh10.3bn) for retailers, and considerable losses for producers.
Losses in the horticultural sector can be huge and immediate. It is perhaps the sheer scale of such immediate losses that has seen horticultural producers develop their own warehousing options and space in order to control this critical functional.
In addressing the scale and nature of the warehousing shortages restricting Kenya’s economic growth, Tilisi polled respondents across the five sectors on their dissatisfactions with their existing warehousing facilities.
From the survey, more than a quarter of respondents were dissatisfied with their current warehousing.
The highest level of dissatisfaction with existing warehousing by sector came from the pharmaceuticals industry at 43% dissatisfaction, followed by FMCG/ manufacturing both at 38%, and horticulture at 33%.
Only in retail are current facilities deemed fully adequate, while 90% of logistics and handling companies were also satisfied with their current warehousing facilities.