The landscape of East African business is undergoing a shift. Traditionally, Kenyan firms have been the dominant force expanding into neighboring markets. However, the tide is turning, with a surge of companies from other EAC countries like Uganda, Tanzania, Rwanda, and Somalia setting their sights on Kenya’s lucrative opportunities.
This influx of regional investment is targeting key Kenyan sectors, including services, manufacturing, agriculture, and even oil and gas. Deep-pocketed investors are challenging the long-held Kenyan dominance, shaking things up for local businesses.
Companies like Amsons Group (Tanzania), Taifa Gas (Tanzania), Maziwa (Uganda), Premier Bank (Rwanda), Yego Global (Rwanda), and Lipton Teas and Infusions Rwanda (Rwanda) are all making significant inroads into the Kenyan market. This comes after years of Kenyan banks, insurers, and manufacturers successfully venturing into the wider EAC region.
The EAC boasts a combined economy valued at $312.9 billion and a population exceeding 300 million, making it a market ripe with potential.
One recent example is the Tanzanian conglomerate Amsons Group’s formal bid to acquire Kenyan cement giant Bamburi Cement for a staggering Sh23.59 billion ($183 million). This move highlights the growing appetite of EAC firms for a slice of the Kenyan market, and promises to intensify competition within the East African cement industry. Existing players like National Cement Company, Mombasa Cement, and East Africa Portland Cement Company will undoubtedly feel the heat.
Just a few months prior, Uganda’s leading dairy processor, Pearl Dairy Farms (famous for their Lato brand), received approval to acquire a Kenyan dairy company. This acquisition aims to overcome supply chain hurdles that have hampered Pearl’s ability to distribute their products effectively in Kenya.
The approval, granted by the Comesa Competition Commission, allows Maziwa (Pearl’s non-operating holding company) to take full ownership of Highland Creamers & Food Limited, a Kisii-based company responsible for the Farmily Milk brand.
“This access to separate milk pools in both Kenya and Uganda will allow for growth in the Kenyan market without relying on imports,” stated Pearl upon receiving the green light.
Furthermore, Pearl has partnered with Kenya’s state-owned financier, the Kenya Development Corporation (KDC), to invest jointly in local dairy ventures. This collaboration signals a potential for even more deals to follow the Highland Creamers acquisition.
Pearl envisions using this acquisition to establish a Kenyan manufacturing base, streamlining their supply chain and granting them quicker access to the Kenyan market compared to importing products from Uganda.
Another noteworthy example is Taifa Gas Investment, Tanzania’s leading supplier of liquefied petroleum gas (LPG). They are currently constructing a massive 30,000-tonne LPG import and storage terminal in Mombasa, Kenya. This project underscores the potential benefits of improved trade relations between Tanzania and Kenya.
