Tide changes as businesses in region make a beeline for Kenyan market

PHOTO

East African Community (EAC) businesses are increasingly expanding into Kenya’s key sectors, including service, manufacturing, agriculture oil and gas, bucking a trend where Kenyan firms have long dominated forays into the region’s markets.

Deep-pocketed investors in firms from EAC countries such as Uganda, Tanzania, Rwanda and Somalia have been expanding their footprints into the country, threatening the dominance that has for long been almost exclusively enjoyed by locals and businesses beyond the region.

The growing interest of regional firms such as Amsons Group, Taifa Gas, Maziwa, Premier Bank, Yego Global, and Liptons Teas and Infusions Rwanda in the Kenyan market, comes after years of many Kenyan firms, including banks, insurers and manufacturers, expanding into the EAC market in search of new opportunities.

EAC region’s economy was valued at $312.9 billion and had a population of 300.4 million people at the end of 2021, according to the trade bloc’s data.

The Tanzanian firm has pledged to strengthen Bamburi’s position as a “leading” cement player in the East African cement market, signaling that it will up rivalry with existing players such as National Cement Company, Mombasa Cement and East Africa Portland Cement Company.

Amsons’ impending entry comes hardly three months after Uganda’s leading milk processing firm, Pearl Dairy Farms, known for its popular Lato brand, received approval to acquire a Kenyan dairy firm giving it room to overcome hurdles that have been disrupting the supply and sale of its products in Kenya.

The Comesa Competition Commission, in a notice dated March 11, gave a nod to Maziwa, the non-operating holding company incorporated in Mauritius, to acquire a 100 percent stake in Highland Creamers & Food Limited, a Kisii-based firm that started operations in 2015 and is behind the Farmily Milk brand.“The access to the two separate milk pools in Kenya and Uganda, will also allow for growth in the local Kenyan market without dependency on imports from other nations,” said Pearl on getting the approval.

Pearl signed a deal with the State-owned financier Kenya Development Corporation (KDC) to invest jointly in local dairy ventures, signalling that more deals could be on the way after the Highland one.

Pearl hopes to use the acquisition to set up a manufacturing base in Kenya and bypass supply chain challenges, giving it quicker access to the market as opposed to bringing in the products from Uganda.

The firm had last year signed a deal with the KDC, to invest jointly in local dairy ventures in Kenya.

Another Tanzanian firm, Taifa Gas Investment, which is the largest supplier of liquefied petroleum gas (LPG) in Tanzania, is constructing a 30,000-tonne LPG import and storage terminal in Mombasa, pointing to the dividends of improving Tanzania-Kenya trade relations.