Optilube Business in Kenya
Joseck Matheri
Dear Ivan,
Good morning! Hope you are awake as you watch Kenya versus US....we just scored !
Well, we have had a long difficult time full of uncertainties with the Kenyan government on legalities of importing Optilube. We have had many meetings with many government departments but finally we made a breakthrough today!
Kindly furnish us with these details :
I)What is the shelf life of Optilube?
2) What is What is the FOB price from UK?
3) Can we work with a loyalty margin of 6.5 %?
4) Can your lawyer send us a draft partnership agreement?
We look forward to speedy resolutions of all outstanding issues so we can get to business soonest.
Kind Regards,
Matheri C.J.
Joseck Matheri
Dear Ivan,
Thank you for this business friendly offer.
We are agreeable with these terms.
Kindly go ahead and send the legal agreement draft .
Do kindly also confirm FOB for the 82g tube.
We do anticipate a mutually beneficial relationship as we embark on this venture.
Best regards
CJ Matheri
Dear Jozeck,P'se find attached as requested.Ivan
Dear Ivan,
Good morning! Hope you are awake as you watch Kenya versus US....we just scored !
Well, we have had a long difficult time full of uncertainties with the Kenyan government on legalities of importing Optilube. We have had many meetings with many government departments but finally we made a breakthrough today!
Kindly furnish us with these details :
I)What is the shelf life of Optilube? - 3 Years
2) What is What is the FOB price from UK? - $0.75
3) Can we work with a loyalty margin of 6.5 %? We suggest to go with a minimum of 10% Loyalties for orders less than 15,000, 7% for orders over and above 15,000. However should you have a bigger order beyond this band we shall discuss on a further lower rate based on the volume.
4) Can your lawyer send us a draft partnership agreement? With your confirmation on the we shall proceed to share the draft.
Joseck Matheri
Dear Ivan,
In addition, please give us this info:
1) Shipping estimate cost for the 5,000 tubes
2)Package dimensions
Regards,
Matheri C.J.
Joseck Matheri
Thanks alot Ivan, what about sea freight ? How long is it likely to take ?
Dear Jozeck,Optilube 82g tube is USD:1.2 FOBThe carton for each that's 42g and 82g is 72 tubes.The 42g Carton is 3.5Kg while the 82g Carton is 9.4Kg.For panning purposes as you work out your numbers air freight may cost you any where between 30-45% of order value otherwise since Kenya has a carrier in KQ which Uganda does not have you will get better rates i suppose.I hope the above clarifies,We shall proceed and share the draft copy by next week.Kind Regards,Ivan
Joseck Matheri
Thanks Ivan. Do you have reliable shippers you can recommend?
Dear Jozeck,Of course as you be aware Sea freight is a lot cheaper, lead time UK to Mombasa will be 30-40 days.And cost may be 20-25% of the value of the order if the goods are destined for Uganda but for Kenya it is a lot cheaper it could come down to 10-15% considering that there is a 500Km saving that's Nairobi - Kampala.And here what we may consider doing is for a LCL for Mombasa.Ivan
Joseck Matheri
Received. We shall revert obce our lawyer advises . Certainly much sooner!
Matheri
Dear Jozeck,P'se find attached a draft copy of the MOU for your kind attention.Will wait to hear from you in case of any comments,Our sincere apologies for dragging but our advocate has been up and about.Kind Regards,Ivan
Joseck Matheri
Dear Ivan,
Thank you for your email to follow up on the progress of the agreement.
We have had our lawyer review it, hence the delay on our part.
Please find the revised document attached with his comments, and our areas of concern. In addition, in order for our lawyer to produce a finer draft, he requires to see a copy of your agreement with the UK principals .
Kind Regards,
Matheri C.J.
Dear Jozeck,Hope you are keeping well,This s to check with you on the progress of the draft?Looking forward to hearing from you?Kind Regards,IvanOn Monday, July 28, 2014 3:32 PM, ivan makumbi <makiv...@yahoo.com> wrote:
Dear Folks,Once Again our sincere apologies for the delay on this one.Kind Regards,Ivan
Joseck Matheri
Appreciated Ivan. Meanwhile I suggest you seek legal advise on this issue as it is pertinent . From this end a vigilant business man will ask himself queries like:
1) If we need financing from our bank, certainly we shall be required to produce the secondary agreement (with Samba) and the primary agreement (between you and the UK) to access viability of financing such a project.
2) What if your agency with the UK manufacturers is ending this year on non renewable terms ? Where would that leave us?? etc etc .
In any case Ivan you have emphasised in all our meetings on "total transparency" . It's a great way to nurture business .
Kind Regards,
Matheri C.J.
Dear Jozeck,Many thanks for the comments, we shall pass on the same to our lawyer for further advise.Mean while at this moment we do not see a need nor value in sharing a copy of the agreement with OMS.We should be able to revert by mid week on any aspects raised.Kind Regards,Ivan
<Agency Agreement Propsero Directors Edit 1.doc>
Joseck Matheri
When are youin town? I think a common meeting like we have done when we come to Uganda would sort out so many of these issues . I'm slightly concerned on the time facctor.
Kind Regards,
Matheri
Dear Jozeck and the Team,P'se find below our comments in respect to yours:1). On page 1 section 1 under Appointment:We are agreeable to offer you exclusive rights of the territory however this has a relationship to clause 9 TERM. Where as you had indicated for this agreement to remain in force for 5 years we are suggesting that the initial arrangement shall be exclusive and for 1 year subject for review based on performance of the agent as set forth in this agreement.
In other words if the agent delivers on the performance variables set forth in this agreement in the initial 12 months the renewal will be earned subsequently. Otherwise we can not commit on the onset to such a long period of time without a good visibility of the performance potential of the agent.2). Section 2 Distribution:P'se note that part b of section 2 indicates that ALL orders shall be made to the principle and as such direct payments shall be made to the same.For avoidance of doubt Section 6CVI further indicates that the principle shall effect transfer of funds from the agent within 24 hours from confirmation of receipt of the same within 24 hours.
3b). The aspect of minimum shelf life of 75% remaining shall be up held under our collaboration.3c). Although our desire is to establish a mutually beneficial long term relationship with Prospero no need to mention it in this agreement. We believe one will lead to another. We shall delete this clause!5c). This section indicates that the products shall be delivered ex works UK. Our understanding is that upon handing over of goods to your selected forwarder in the UK and he acknowledges receipt (after his dudelligence) liability passes on to the agent, in cases of transit damage the insurance of goods in transit should come into play. However should there be any instances of manufacturer defects the principle shall remain responsible and follow it to the very last meaningful resolution.6Bi). We suggest to leave out this clause.6CIV). The cumulative sales for the initial 12 months is USD: 25,000 (Twenty Five Thousand Only)6CV). That royalties to the principle shall be paid along side the orders as opposed to an accrual basis.6CVII). That on payment of the USD:35,000 as a one off royalty fee Prospero automatically assumes exclusive rights to the Kenyan Market.8A). In the event of violation and or breach of the terms of this agreement we suggest termination within 3 months, the spirit in which this clause has been crafted is for both parties to operate and run the business within the agreed parameters promoting good will and mutual benefit at all times. This is no different from clause 8Bii, we still hold out for 90 days.We shall wait to hear from you.On another note we plan to be in Nairobi next week, we shall reach out to you in case you are in town.Kind Regards,Ivan