Rédaction Africa Links 24 with Uganda Monitor
Published on 2024-03-27 05:13:49
Uganda’s Maziwa, the owner of the Lato brand, has recently received approval from the Comesa Competition Commission to merge its assets with a Kenyan milk processing company. The approval allows Maziwa, a non-operating holding company incorporated in Mauritius, to acquire a 100 percent interest in Highland Creamers & Food Limited, a Kenyan dairy company that owns the Family Milk brand. The merger has been deemed not likely to substantially prevent or lessen competition in the common market or be contrary to public interest.
According to data from the Comesa Competition Commission, Brookside Dairy currently holds the largest market share in the dairy industry in Kenya, accounting for between 5 and 10 percent of the total 25 companies producing and selling dairy products. Highland Creamers & Food Limited, on the other hand, controls only between 0.5 and 0.8 percent of the market share, which is expected to increase when combined with the 0.5 to 1.4 percent market share held by Maziwa.
Maziwa’s primary business activities include collecting, processing, and selling milk and milk products under the Lato brand in Uganda, Egypt, Malawi, and Kenya. The company distributes products such as ultra-high temperature milk, UHT milk (flavoured), milk powder, butter, and yogurt through Highland Creamers & Food Limited.
The application for the merger was submitted to the Comesa Competition Commission in November 2023, indicating that both companies have individual assets or turnover exceeding $50 million. In Uganda, Maziwa operates Pearl Dairy Farms, which produces milk products under the Lato brand and exports to countries like Egypt, Kenya, Tanzania, and DR Congo.
Despite facing challenges with exporting products to Kenya, Pearl Dairy is exploring new markets in Zambia, Ethiopia, South Sudan, and Malawi. The approval of the merger comes approximately a year after Kenya allowed Maziwa to invest in its regional dairy factories through an agreement approved by the Kenya Development Corporation.
In April last year, Pearl Dairy secured a $35 million loan from the International Finance Corporation to support its expansion into Kenya and Uganda. This strategic move signals Maziwa’s commitment to expanding its presence in the region and capitalizing on new market opportunities. The merger with Highland Creamers & Food Limited will further strengthen Maziwa’s position in the dairy industry and enhance its ability to meet the growing demand for milk and milk products in East Africa.
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