Money Markets

KenolKobil increases stake in Zambia firm

A Kenol/Kobil fuel station along Koinange street in Nairobi. Kenya’s second biggest oil marketer has consolidated its presence in the East and Central Africa region by increasing its stake in a lubes plant in Zambia through an acquisition. File

A Kenol/Kobil fuel station along Koinange street in Nairobi. Kenya’s second biggest oil marketer has consolidated its presence in the East and Central Africa region by increasing its stake in a lubes plant in Zambia through an acquisition. File 

KenolKobil —Kenya’s second biggest marketer— has consolidated its presence in the East and Central Africa region by increasing its stake in a lubes plant in Zambia through an acquisition.

“The additional acquisition of 10.5 per cent by Kobil Zambia, from Chevron, has now increased Kobil’s stake at Lublend Limited to 25.5 per cent, following an initial acquisition of 15 per cent share holding from Total Zambia in 2008,” said the firm in a statement.

The acquisition will increase the firm’s share of the lubricants business beyond the current 47 per cent through increased supplies to that country’s key economic sectors.

Investors at the Nairobi Stock Exchange where KenolKobil is listed appeared excited by the acquisition with the share price at Sh50 yesterday after the acquisition was announced, compared to Sh48 on Friday.

Already, the firm that is present in seven Eastern Africa countries has grown its retail network to 25 stations over the past two years, becoming the third biggest oil marketer in Zambia.

Key sectors

Apart from supplying Zambia’s key economic sectors, KenolKobil hopes to use its presence to open new business lines in South Eastern Democratic Republic of Congo, Zimbabwe and Malawi, hence wrestling share that has traditionally been at the strangle hold of multinationals. Last August, KenolKobil expanded its footprint in East Africa after buying a 100 per cent stake in Oil Burundi from Engen International Holdings (Mauritius) Limited. Apart from Zambia and Kenyan operating companies, KenolKobil’s expanding pan-African business network also Uganda, Tanzania, Rwanda and Ethiopia.

“The new acquisition will give the KenolKobil Group more control of the management of the plant and will also give it more representation in the company’s board,” the firm said in a statement. It added that the move fit its strategy of diversifying its business in the region.

“The move will strengthen the company’s market share in the robust lubricants business in Zambia,” it said.

Kobil Zambia, KenolKobil’s subsidiary in the southern African country, said its lubricants business had grown by 47 per cent since 2008 thanks to demand from the mining, industrial, transport and construction sectors.

The company operates in other markets in the region including Rwanda, Tanzania, Uganda and Ethiopia.