Kitui Flour Mills to acquire 100% stake in Rafiki Millers

KENYA – Kenyan-based Kitui Flour Mills, the maker of the ‘Unga wa Dola’ wheat and maize flour brand, is set to acquire a 100 percent stake in Rafiki Millers Limited.

The proposed acquisition has been given a nod by the Competition Authority of Kenya ruling,  which stated that the transaction is unlikely to negatively impact competition in the market for wheat milling, nor elicit negative public interest concerns.

“The analysis considers the impact that the proposed transaction will have on public interest which includes the extent to which a proposed merger would impact employment opportunities, competitiveness of SMEs, particular industries/sectors, and the ability of national industries to compete in international markets,” said the Authority.

After the merger, the assets of Kitui Flour Mills are set to cross the KES 1 billion (US$6M).

 “The transaction between Kitui Flour Mills Limited and Rafiki Millers Limited met this threshold for mandatory notification and full analysis as provided in the Competition (General) Rules, 2019,” said CAK.

Founded in 1982, Kitui Flour Mills is among Kenya’s producers of home products such as Premium Maize Flour, Dola Wheat Flour, Dola Chapati Flour, Atta Flour, and Baba Lao Maize Flour, among others.

CAK noted that the manufacturer commands 13% of the wheat milling market and is the third largest firm behind Mombasa Maize Millers (22%) and Grain Industries Limited (15%),”

There are over 40 formal grain millers in Kenya, a majority of whom are members of the Cereal Millers Association and represent over 85 percent of the total wheat milling capacity in Kenya.

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.

Before Rafiki Millers Limited shut down in 2021, it was involved in the wheat milling and confectionery business.

Last year, the maker of the ‘Unga wa Dola’ entered the cooking oil market as part of a diversification strategy to keep its profits afloat.

The edible oil would be manufactured at its Vipingo plant in Kilifi County, spurring the area’s economy.

The acquisition is set to increase Kitui Flour Mills’ capacity as well as market share after the takeover.

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