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G4S Aims to Boost East Africa Sales 50%, Expand in South Sudan

May 24 (Bloomberg) -- G4S, the world’s biggest security company, aims to increase revenue in eastern Africa by 50 percent as it expands into Ethiopia and Southern Sudan and seeks acquisitions.

Sales will increase to $250 million by 2013 through “organic growth,” Adam Miller, managing director of East Africa for G4S, said in an interview on May 20 in Kenya’s capital, Nairobi. G4S had global sales of 7.4 billion pounds ($11.9 billion) last year.

The regional office covers Madagascar, Mauritius, Tanzania, Kenya, Uganda, Malawi, and Rwanda. G4S plans to enter Ethiopia by August following a political “change in outlook” toward welcoming foreign investors, and Southern Sudan after it declares independence on July 9, he said.

G4S earns most of its African revenue from companies such as Barclays Bank of Kenya Ltd. and Standard Chartered Bank Ltd. or individuals, while in the U.K. and U.S. it provides more services to governments.

The company aims to expand its African operations beyond basic activities such as providing security guards, alarms and emergency response, and develop businesses such as secure transportation of shipments from the ports of Mombasa in Kenya and Dar es Salaam in Tanzania, and handling cash for commercial and central banks, Miller said.

G4S runs a training academy in Nairobi to teach new skills to fraud and corruption investigators, and would consider bidding to manage Kenya’s first privately-run prison, Miller said. Kenya’s Finance Ministry has approved the idea though it hasn’t invited bids yet, he said, citing a letter shown to him by the prisons commissioner.

‘Capacity Issue’

“Kenya has got a desperate capacity issue as well as a standards issue in detention,” Miller said. “The opportunity is to address both of those problems by using the private sector financing capability and expertise.”

G4S is “highly acquisitive” and has identified “a few” potential purchases in the region, Miller said, without providing more details. The company is also considering a listing on the Nairobi Stock Exchange, he said.

G4S is the biggest non-government employer in East Africa, with 35,000 workers, Miller said, citing data the company has collected from labor ministries and industry associations. The Nairobi-based Federation of Kenya Employers and Kenya Private Sector Alliance said they could not confirm the numbers.

To contact the reporter on this story: Sarah McGregor in Nairobi at smcgregor5@bloomberg.net.

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net.

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