Kenya’s third largest miller, Kitui Flour has gotten a nod from the Competition Authority of Kenya (CAK) to fully acquire Rafiki Millers.
- •Rafiki Millers closed operations in April 2021.
- •It was involved in wheat milling, with 3 per cent market share, and confectionery business.
- •Kitui Flour Mills Limited commands 13 per cent of the wheat milling market and is the third largest firm behind Mombasa Maize Millers (22 per cent) and Grain Industries Limited (15 per cent).
According to the Competition Authority of Kenya, the market share of the merged entity will remain unchanged and the parties will face competition from other players controlling 87 per cent of the market.
“This approval has been granted based on the finding that the transaction is unlikely to negatively impact competition in the market for wheat milling, nor elicit negative public interest concerns – the two key considerations during merger analysis,” noted CAK.
During merger analysis, the Authority also considers the impact that a proposed transaction will have on public interest. Public interest in this case refers to various economically-inclined concepts that, when considered, protect the welfare of the public. In the Act, some of the public interest considerations are the extent to which a proposed merger would impact employment opportunities; impact on competitiveness of SMEs; impact on particular industries/sectors; and impact on the ability of national industries to compete in international markets.
- •There are over 40 formal grain millers in Kenya, a majority of whom are members of the Cereal Millers Association and representing over 85 per cent of the total wheat milling capacity in Kenya.
- •These millers mostly sell their products in the domestic market. The notable members of the Association are; Bakex, Baraka Maize Millers, Capwell Industries, ETG, Grain Industries Limited, Goldleafe Kenya Limited, Jamii Milling, Kenblest Group, and Kitui Flour Mills.
- •Others are; Lotus Home Baking Flour, Louis Dreyfus Company, Maisha Flour Mills, Milling Corporation of Kenya, Mombasa Maize Millers Limited, Mcneel Millers, Osho Grain Millers Limited, Unga Limited, and United Millers Limited.
