The Competition Authority of Kenya (CAK) has approved the acquisition of certain assets of Ramoda Ceramics by KEDA (Kenya) Ceramics Company, which will see the latter’s market share increase to 31 percent post merger.
- •Ramoda had experienced liquidity challenges and closed its operations on constraints in the general business, strategic and operational divisions.
- •The assets comprise of a number of properties, plants and various categories of machinery and equipment which relate to the business of manufacturing, distributing and selling ceramic tiles.
- •Ramoda Ceramics is incorporated in Kenya and is part of the Ramco Group, dealing in manufacturing, distributing and selling of ceramic tiles.
The transaction, CAK says, will positively impact employment with approximately 500 direct jobs, following reopening of the Ramoda’s mothballed manufacturing plant – significantly contributing to the local and national economy.
The main players in the ceramic tiles manufacturing and distribution market in Kenya include KEDA (25%), SAJ Ceramics ( 12%), Millennium (2%), Modern (2%), Goodwill (15%), and Ramoda (6%), alongside numerous importers and distributors (38%).
“The merged entity will face competition from other players with a market share of 69 percent, with importers accounting for 57 percent of the market for ceramic tiles in Kenya,” CAK said in a statement.
“Therefore, the structure and concentration of the market for ceramic tiles is unlikely to be negatively affected. Premised on the foregoing, the proposed transaction is unlikely to lead to a substantial lessening of competition in the market for ceramic tiles in Kenya,” CAK added.
According to the Kenya Association of Manufacturers (KAM), Kenya produces approximately 12.40 million in ceramic tiles annually – about 43% of the country’s annual demand – thereby necessitating imports to bridge the gap. Further research by LimeGroup Consulting Africa shows that approximately 40 million square meters, with an average annual growth rate of 8 percent, fueled by the country’s rapid urban development and the booming construction industry.