Buyout deal exposes Unga’s wheat flour market share

Unga Group commands an estimated 4 percent of Kenya’s wheat flour market, a report from the Competition Authority of Kenya shows.

In a statement announcing the buyout of Rafiki Millers by Kitui Flour Mills, the CAK lists Unga Group at number six, trailing Uzuri Foods Ltd (7 percent), Pembe Flour Mills (8 percent), Kitui Flour Mills (13 percent), and Grain Industries Ltd at 13 percent.

The report notes that Mombasa Maize Millers commands the largest share of wheat flour in Kenya at 22 percent, a position the company has maintained since 2021. Mombasa Maize Millers owns several flour brands including Taifa, Ndovu, Swan, Cosmo, Bahari, Shibe and Tima.

In the latest developments in the market segment, Kitui Flour Mills, which produces brands such as the Dola range of flour and Baba Lao, has received the green light to wholly acquire Rafiki Millers Ltd.

Rafiki Millers, which shut its doors in 2021, was involved in wheat milling and the production of confectionery products before closing down.

Read also: The man who brought East Africa’s roadside chapatis

Competition in wheat milling business

“The transaction, therefore, qualifies as a merger within the meaning of sections 2 and 41 of the Competition Act No. 12 of 2010,” explained CAK.

“The proposed transaction is unlikely to lead to a substantial lessening of competition in the market for wheat milling in Kenya,” added CAK.

MILLER%SHARE (2021)%SHARE (2022)%SHARE (2023)
Mombasa Maize Millers222122
Grain Industries Ltd161515
Kitui Floor Mills Ltd11913
Pembe Floor Mills Ltd688
Uzuri Foods Ltd777
Unga Ltd454

Rafiki Miller Ltd
Estimated market share of wheat millers 2021-2023. Source – Merging Parties, CAK

From making bread to cakes and animal feed, wheat is the second most popular carbohydrate in Kenya after maize. KNBS statistics show that Kenya’s per capita consumption is roughly 43 kilos.

The Nairobi Securities-listed company issued a profit warning last year as a tough business environment characterized by high interest rates and reduced disposable incomes hit the company hard.

In December 2023, Unga Group announced that it was reducing its workforce by up to 50 positions citing tough economic conditions that have seen its revenues dip significantly.

“Currently, the biggest challenge for many organizations is to remain financially viable from both a profitability and a cash flow perspective. We have worked on several initiatives to bring our costs in line with anticipated business performance but, despite this, it has become apparent that we also need to restructure our organization,” Unga Group said.

Other companies that have resulted in employee cuts in the past year were EPZ firms Ashton Apparel and Mombasa Apparel. NSE listed CIC Group, and StanChart also cut jobs.

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