Swiss firm to buy Kenyan forwarder of fresh produce

What you need to know:

The move, if approval, is set to boost Kenya’s bid to sidestep middlemen in direct export of fresh produce.
It removes unnecessary costs, potential delays and most importantly allows a fresher product to be offered to the consumer.
The merged company will handle around 70,000 tonnes of perishables yearly.

Swiss logistics company Panalpina is set to acquire Air Connection, a Kenya-based forwarder specialising in the export of flowers and vegetables to multiple destinations including the Netherlands and the UK.

The move, which is subject to regulatory approval, is set to boost Kenya’s long running bid to sidestep middlemen in favour of direct export of fresh produce. The deal comes after Panalpina’s acquisition of Airflo in Kenya in 2016.

Family-owned Air Connection is currently the Kenya’s fourth largest forwarder in terms of air freight export volumes.

The merged company will handle around 70,000 tonnes of perishables yearly, both companies said in a statement.

“While most of Panalpina’s flower exports from Kenya currently go to auctions in Amsterdam, we are specialised in direct shipments to customers, and while Panalpina is strong with big charter shipments from Kenya to Europe, our strength lies in smaller shipments on scheduled passenger flights to over 150 destinations worldwide,” said Manjit Brar, owner and managing director of Air Connection.

Panalpina Airflo managing director Conrad Archer said the deal comes as a huge business boost as direct shipments are increasingly being sought in the perishable market.

“Increasingly, buyers of perishables want to source directly from the producer and producers want to sell directly to the country of consumption. Direct shipping bypasses intermediaries, reducing touch points in the supply chain,” said Mr Archer.

“It removes unnecessary costs, potential delays and most importantly allows a fresher product to be offered to the consumer.”

The merged company will employ over 350 staff in Nairobi and offer 3,000m2 of cold storage capacity, which is soon to be extended even further to 4,000m2.

It will also run an office at the Port of Mombasa where Panalpina plans to develop the ocean freight business for both perishables (using reefers) and dry cargo. The dry cargo activities involve the import of textiles and export of fashion products, mainly to the US.