South African logistics firm OneLogix has expanded into Kenya’s transport market by buying into the local subsidiary of Kuehn+Nagel.
OneLogix, which is listed on the Johannesburg Stock Exchange, is negotiating to buy a 30 per cent stake in the Swiss logistics company in a deal valued at $1 million (Sh100 million). Kuehn specialises in the bulk vehicle haulage business.
The investment will go towards buying a fleet for the business, IT infrastructure and capacity building in the operations and technical skills development. OneLogix said that its expansion into Kenya is meant to secure a piece of the booming imported vehicle transporting business.
In the final throes
“We are in the final throes and hopefully the deal will be ratified within the next month. The opportunities lie in the transportation of passenger vehicles from Mombasa to destinations in Kenya and neighbouring countries in a more efficient manner with more advanced fleet and systems,” Geoff Glass, the OneLogix financial director told the Business Daily.
OneLogix has also expanded into Tanzania where it is eyeing a similar business. Industry insiders say the firm will likely target companies or car dealers who import many cars as most individual buyers prefer to personally drive their vehicles from Mombasa port or hire drivers.
“Car carriers are cheaper when you are bringing cars in volumes. They are also safer,” said Kenya Auto Bazaar Association secretary Charles Munyori.
On average some 7,000 cars are imported every month. Mr Munyori added that the car carrying business is dominated by Mombasa-based transporters.
Skaldo Transporters, Delights Kenya and Corner Garage Transport are some of the major car carriers. Data from the Economic Survey 2015 shows that the road transport sector grew by 15.2 per cent in 2014 with output reaching Sh600 billion from Sh521 billion a year earlier.
The growth is expected to continue going forward. Transportation of heavy equipment needed in the construction, mining, oil and gas sector is expected to increase the use of specialised logistics firms and international firms have taken note.
*This story has been edited to reflect the fact that the deal is not yet signed and is still under negotiation.