MD/CEO BOC KENYA PLC
BOC Kenya Plc is a leading supplier of industrial, medical, special gases and gas mixtures as well as end to end engineering services for installation of gas applications in Kenya, Tanzania and Uganda. The Company set up in Kenya in 1940 and is listed on the Nairobi Securities Exchange since 1969. Established in 1886 in Britain, the BOC organisation has been producing industrial gases for more than 120 years.
BOC Kenya Plc is internationally a member of Linde AG and Plaxair, a world leading gases and engineering company with approximately 80,000 employees working in more than 100 countries worldwide. The Company’s immediate majority shareholder is BOC Holdings UK, which became a member of the Linde Plc in 2002. In 2018, The Linde Group and Plaxair combined to create a leading global gas and engineering company.
Due to good management, corporate governance structure and return to profitability of BOC Kenya, Carbacid Investments Plc and Aksaya Investments LLP made an Offer to acquire all the ordinary shares of BOC Kenya at a price of KES 63.50 per Share. This is in abeyance, pending a number of appeals by different stakeholders.
The Company’s portfolio includes dozens of different gases and mixtures, as well as related equipment and services. The Company’s customer base cuts across a large spectrum and includes public and private hospitals, food processors, civil and mechanical engineering contractors, motor vehicle body builders, hotels and restaurants, the informal business sector (“Jua Kali”) and small and medium enterprises.
BOC Kenya product range includes:
Bulk gases (liquid oxygen and liquid nitrogen). BOC boasts of the only Air Separation Unit (ASU) in Kenya capable of producing atmospheric liquid gases with purity levels of 99.95%. The company provide gas solutions in high pressure cryogenic vessels, tailored for specific applications.
Packaged (cylinder) gases. These comprise the Company’s primary product line and include medical gases, industrial gases, special gases, gas mixtures and liquefied petroleum gas. Atmospheric gases, gas mixtures and acetylene are produced at the Company’s Nairobi plant while the other gases are purchased from other gas suppliers, mostly overseas.
Engineering services. These includes supply of medical equipment, construction of medical and other gas pipelines, LPG installations, provision of company owned cryogenic gas storage tanks and related maintenance services. BOC has a team of highly qualified engineers and technicians who provide Customer Engineering Services (CES) to the highest international standards.
The Company’s core products remain oxygen (which has both medical and non-medical applications), nitrogen and dissolved acetylene (DA). Oxygen and nitrogen are sold either in liquid form or are packaged into cylinders. Gas sales in liquid form comprise medical oxygen sold to hospitals that have installed medical pipelines in their wards and other patient care areas, oxygen, and nitrogen to industrial customers. Filler materials constitute welding products.
Volumes of medical gases have risen year-on-year consistent with growth in the health care sector, increased competition from gas companies and customer on-site generation plants notwithstanding. Meanwhile, volumes of industrial gases have decreased due to the combined effect of competition, lower observance of quality standards and illegal gas filling activities. Management has taken certain steps and the Company is hopeful that track and tracing innovations and working with the appropriately mandated enforcement agencies, the illegal filling of cylinders will abate.
In the period 2015 to 2017, profitability dropped as revenue dropped occasioned by competitive pressures in the market, especially on industrial gases and accessories. The Company has since then sought to recover sales volumes across its portfolio alongside Kaizen driven cost management and efficiency projects, all of which have had a desirable effect on profitability and returns. Since 2018, the company has had year on year growth on Net income and Gross Profit on the back of these efforts.
In the year 2020 this growth was 12.5% over the prior year. Even though Gross margins and operating margins remain under pressure due to the combined effects of inflation, exchange rates and a constrained ability to recover cost increases from customers, the trend has shifted positively
Late payments by public sector customers remain a challenge that impacts the Company’s revenue adversely when supplies to such customers are withheld as a mitigation for credit risk and on high levels of bad debt provisions for invoices that are not settled on time. This challenge is dealt with via regular engagements with Customers, some of whom are also dependent on timely national government funding.
The Company continues to have a cash healthy position with quick assets (cash and cash equivalents, bank deposits and investments in treasury bills) of KES 561 million. Current assets have remained more than or nearly twice current liabilities.
Management, with the Board’s oversight, is committed to ensuring sustainable improved financial performance of the company in the coming years. In this regard, BOC Kenya has developed a simplified strategy to defend its market position and break into new segments through focused internal alignment.
BOC Kenya expects to do this through protecting its gas business, creating new business streams, turning around customer service operations and strengthening execution with the talented people. Actions have been and are being taken to mitigate against external factors that bear on the company’s results concurrently with effort`s to ensure that, internally, all employees are demonstrating good behaviours of living BOC Kenya’s values, achieving the set goals and making an impact.
Though Covid-19 resulted in an increase in demand for medical oxygen, demand for industrial oxygen (and other industrial gases) was depressed by a generally difficult macro-economic environment. Also, in supplementing its local production of oxygen with imported product, BOC Kenya incurred higher costs that it could not necessarily fully pass on to customers. Nevertheless, the company played an important role in increasing oxygen access in Kenya and supported the healthcare sector in saving lives if Kenyans.
Marion Gathoga-Mwangi was appointed as Managing Director in July 2018. Ms. Gathoga-Mwangi is an accomplished Senior Executive with over 20 years of local and international experience in Commercial and General Management predominantly in the manufacturing sector. She returned to Kenya in 2017 after a successful tour of duty with Groupe Lactalis – Parmalat Botswana (Pty) where she served as Country Head. Other key roles that Ms. Gathoga-Mwangi has previously held include Country Director of Cadbury Kenya and East Africa Limited and General Manager at Unga Limited (Seaboard Corporation).
Ms. Gathoga-Mwangi also had a long and distinguished career with Bayer East Africa and Nestle Foods (k) Ltd. She joined BOC from the Association of Certified Chartered Accountants (ACCA) where she held the position of Head of ACCA.
Ms. Gathoga-Mwangi holds a Bachelor of Science (Honours) Degree in International Business Administration from the United States International University (USIU) Kenya. She is a member of Women Corporate Directors (WCD), Kenya Chapter and Women on Boards Network (WoBN).
Other key appointments include holding non-executive board directorship in British American Tobacco (BAT) Kenya Plc and Kenya Association of Manufactures (KAM), where Marion is the Vice Chair of Women in Manufacturing (WIM).
In her professional life of over 20 years,’ Marion has established herself as a Turnaround CEO. After being appointed – almost by surprise – General Manager at the tender age of 29, Ms Gathoga-Mwangi deliberately decided she would transition to different business every so often and this would expose her to different challenges and increase her skills and hands on experience.
‘What I was not prepared for was the biases I would face on many fronts. Many of them unrecognizable at face value but later emerging as just the general brokenness we have in our society today. Perhaps the main departure has been what my value system has been all my life. I have been referred to as naïve when I have left business opportunities that would require compromise. I really believe that all of us leaders can conduct our business and lead without compromising our values. Throughout my working life, I have had the privilege of meeting with mentors and coaches that have truly help me transcend these issues.
Ms. Gathoga-Mwangi has been a Trustee of the Palmhouse Foundation for over 18 years and leads the mentoring programme. This has got to be the most fulfilling life and community service work one can ever hope for. About 900 young people have benefitted from the education fund and spend at least the four years in secondary school knowing that they will be mentored through life.
Marion is also a Toastmaster, which serves her interest in public speaking as well as wonderful friends with whom she has this development journey in common. She finds time in her busy schedule to enjoy playing golf, reading, and knitting.
Lately, Marion has been pursuing more speaking platforms to share leadership experiences and inspire upcoming leaders to make sure their values are reflected all around their lives. ‘I believe in the principle of sowing and reaping based on the Bible teaching in Luke 6:38 “Practice giving, and people will give to you. They will pour into your laps a fine measure, pressed down, and overflowing. For with the measure, you are measuring out, they will measure out to you in return’ Marion opines.
‘I want to be known as someone of good character, generous with my time and knowledge, honest, hardworking, and of moderate character. I am so delighted to be part of the SBS culture that resonates with my character’, Marion Gathoga-Mwangi concludes.
Marion Gathoga-Mwangi is 2022 BUSINESS MONTHLY EAST AFRICA TOP 25 MOST INFLUENTIAL CEO IMPACTING BUSINESS.