The Competition Authority of Kenya (CAK) has approved the proposed acquisition of Economic Industries Ltd. by stationery manufacturer, Kenafric Manufacturing.
- According to a statement by the CAK, the merger between the two companies will not hurt the competitive status of the market and will not lead to job losses.
- The regulator stated that Kenafric’s market share stood at 12.3% while that of Economic Industries Ltd. was at 10.3%.
- After the acquisition, Kenafric will ramp up its market share to 22.6%, overtaking Kartasi Industries Ltd, which holds 18.2% of total market share.
“Entry and exit barriers in the market for stationery in Kenya are not high and, therefore, transactions taking place in this market are unlikely to raise competition concerns,” CAK said in the statement.
“The proposed transaction is unlikely to raise competition concerns since the merged entity will face competitive pressure from other players who control 77.4% of the market,” the authority added.
The Stationery Market
According to 2021 data from 6Wresearch, the Kenyan stationery market grew year-on-year (YoY) by 23.33% in value. Currently, Twiga Stationers and Printers Ltd. is the largest player with 49.4% of the total market share. Smaller players like Twaweza Printing Press Limited, Red Ring Industry Limited and Advertising World have recently entered the market, marking it as a competitive ground with profitable prospects.
Kenafric is not only involved in the manufacture of exercise books, writing pads, envelopes, notebooks, and counter-books – but also makes polyvinyl chloride (PVC) and ethylene-vinyl acetate (EVA), rubber footwear, soft drinks, confectioneries, and culinary products.
The acquisition of Economic Industries Ltd., which solely dealt in manufacturing and distributing school and office stationery products and exercise books, will deepen Kenafric’s diversification drive and expand its influence in the country’s business arena.
