Tullow has awarded contracts to 36 companies drawn from Turkana County for the supply of with light vehicles, in an initiative to increase the participation of local businesses within Tullow’s supply chain.
Under the terms of the Kshs. 225 million deal signed at the company’s office today, Tullow oil sourced for 36 vehicles from Toyota Kenya under a 3-year lease and buy contract.
The company then invited bids from Turkana based companies to operate these vehicles, receiving 60 bids against 36 available slots. Tullow then awarded the 36 companies a vehicle each and immediately leased them back from these local businesses, creating an income stream for local entrepreneurs.
The 36 winning companies are expected to take over the lease and buy rights from Toyota, meaning that at the end of the three years, they will take full ownership of the vehicles.
“We recognised that capital was an obstacle to entrepreneurs wishing to do business with us, so we have structured the deal in a way that the 36-companies will have access to financing of this business opportunity,” said Martin Mbogo, the Tullow country manager. “Also, at the end of the three years the companies will take full ownership of the vehicle,” added Mr Mbogo
Over the last year, Tullow has embarked on a series of deliberate efforts meant to increase the participation of local companies within its supply chain as part of a wider plan to ensure the oil and gas sector creates long-standing positive impacts on the economies and lives of host local communities where the company operates.
Recently, Tullow facilitated an international labour organisation certified (ILO) business training program for Turkana based women entrepreneurs, through which the women acquired basic business management skills including accounting, book keeping and marketing .
The company has also aligned its procurement process to increase the sourcing of Kenyan manufactured goods by its contractors.
“These deliberate efforts sit within our broader plan of creating shared prosperity with host communities and positively impacting the economies where we operate by creating opportunities for local companies to do business with us,” added Mr Mbogo.
Since January, Kenyan companies have supplied goods worth Kshs. 6 billion to Tullow and its contractors compared to Kshs. 4.1 billion they supplied in the whole of last year.
Turkana based businesses have supplied goods worth approximately Kshs. 1 billion to date, a 300 per cent rise from the Kshs. 224 million they supplied last year. Overall, Kenyan companies now supply over 80 per cent of all goods and services bought by Tullow and its contractors.