Pwani Oil buys Kartasi in diversification strategy – Business Daily
Kartasi Band limited warehouse at Industrial Area in Nairobi. PHOTO | SALATON NJAU | NMG
Mombasa-based manufacturer Pwani Oil Products has bought stationery firm Kartasi Industries Limited for an undisclosed sum closing a strategic move to diversify its business.
The Competition Authority of Kenya (CAK) said it had approved the deal on the condition that Kartasi’s 69 permanent employees are retained for 12 months after the transaction is concluded.
Pwani Oil, the manufacturer of Freshfri, Salit, and Fry Mate cooking oils, is a major player in the edible vegetable oils and fats industry and has exposure to the laundry and toilet soaps business and is now going into stationery.
The firm has created a new entity called Kartasi Products Limited, which will house the new business for the company that was established in 1978 to produce power alcohol from sugar cane molasses.
“Kartasi Products, the acquiring undertaking is newly incorporated in Kenya, for the sole purpose of the proposed transaction. Its affiliates are involved in, among others, the manufacture of cooking oil and fats, property brokerage, production and distribution of consumer goods like pineapple juice, food colouring, and sugar syrups,” said the CAK.
Kartasi Industries is a major player in the manufacture of the educational and commercial stationery market which has more than 400 players.
It is the third largest player with a 9.7 percent market share behind Twiga Stationers and Printers (38.8 percent) and Kenafric Manufacturing Limited (20.9 percent).
Others are Economic Industries Limited (9.6 percent), Guaca Stationers Limited (6.5 percent), Elite Offset Ltd (5.7 percent), Safari Stationers (K) Ltd (4.3 percent) and National Printing Press Ltd (0.5 percent).
Pwani Oil has been expanding its consumer base by buying brands packaged and priced for different consumer segments, including low-income households.
The company has been on an expansion drive by acquiring the popular Ushindi soap brand, boosting its presence in the fast-growing personal and home care products category.
The acquisition gave it a bigger slice of the lucrative personal and homecare product market along with its brands White Wash and Ndume.
Pwani Oil also acquired the Rainbow detergent soap brand from Match Masters Limited.
The fast-moving consumer goods manufacturer has also expanded into soap finishing lines that make a large variety of specialty soap grades like stamped soap bars used in the hospitality sector.
The company’s cooking oil business recently took a hit after the company was forced to temporarily shut down its oil plant due to a shortage of raw materials, which it blamed on difficulties accessing dollars to pay suppliers on time.
The situation has been compounded by stiff global competition for crude palm oil, which has been exacerbated after Indonesia tightened its export rules to prioritise domestic needs.