Indian conglomerate Godrej Consumer Products has bought a majority stake in Canon Chemicals, the makers of Valon petroleum jelly in Kenya, in a move marking yet another acquisition in the country’s fast-growing beauty market.
Godrej announced that it had bought a 75 per cent stake in Canon Chemicals for an undisclosed amount as part of the listed firm’s expansion into sub-Saharan Africa.
Canon Chemicals is a family-run manufacturer that is based in Mlolongo, Machakos County, and is a member of the Club 101, companies that have participated in the Business Daily-Sponsored Top 100 Survey and exceeded an annual turnover of Sh1 billion.
Canon’s revenues for 2015 stood at Sh1.15 billion.
Godrej will use Canon Chemicals to expand its brands that include air fresheners and baby care products. The Indian manufacturer will also use Canon to expand its products and those of its new partner to other African countries.
“We are delighted to add Canon Chemicals to our home and personal care portfolio in Africa. Canon has a strong track record of serving consumers in Kenya for over 40 years and we look forward to leveraging its strong brand equity and distribution infrastructure for our business,” said Godrej managing director Vivek Gambhi in a statement.
“This acquisition reflects our continued commitment to scaling up our presence in Africa and providing African consumers with a wide range of superior quality products at affordable prices. We remain very excited by the tremendous potential of the African market and look forward to further building our business,” he added.
Godrej’s acquisition is the latest in the cosmetic industry which has been abuzz with merger deals over the last few years.
Flame Tree Group made a similar acquisition late last month and at the time said that it was eyeing the regional cosmetics market, which is estimated will be worth Sh23 billion by 2018.
“SuzieBeauty enjoys an outstanding reputation within its category and incredible awareness among beauty professionals and consumers alike. It has a loyal following that gives it excellent potential for expansion. It will wonderfully complement our brands in the cosmetic category,” said Flame Tree chief executive Heril Bangera at the signing.
A few months earlier Flame Tree bought four beauty brands from Beauty Plus Trading East Africa also for an undisclosed amount.
Lancôme, one of the leading cosmetics brand with sales turnover of $4.5 billion, introduced its high-end skin care, fragrance and makeup products into the Kenyan market in late 2015.
Before that Procter and Gamble’s (P&G) launched of a range of beauty products targeting the mass market in 2014.
In 2013 L’Oreal, one of the top global cosmetic companies, purchased InterConsumer Products, targeting Kenya’s fast-growing lower end of the market, where it had no presence.
Africa accounts for close to a third of Godreje’s international sales and the company says that it plans to consolidate its business on the continent.
“Our hair care and hair extension businesses are performing well and we have learnt a lot about what it takes to be successful in the region,” said Mr Gambhi.