Kitui Flour Mills, the maker of the Unga wa Dola wheat and maize flour brand, has entered the cooking oil market as part of a diversification strategy, which will see it intensify competition for players like Bidco and Pwani Oil.
The new Dola edible oil is manufactured at the company’s Vipingo-based plant in Kilifi.
The entry comes amid high commodity prices following a jump in global crude palm oil - the primary raw material - since early last year after the invasion of Russia into Ukraine and export restrictions by the main source country Indonesia. A two-litre container of cooking oil is currently retailing in the range of Sh572 to Sh741.
“We are pleased to launch Dola cooking oil which demonstrates our commitment to the Kenyan market as a company rooted in Kenya for over 50 years,” said Kitui Flour Mills finance director Anwar Bajber.
“We will continue to invest in and grow with Kenya,” he said, adding that the firm is “keen to continue to identify and pursue opportunities working with our partners and stakeholders.”
Edible oils, including animal and vegetable fats and oils, are the second largest import item after petroleum, with the country spending Sh120.83 billion in 2021 after the price surge, from Sh94.10 billion.
Kenya is a large importer of vegetable oils such as sunflower oils, soybean, corn oil and commonly used crude palm oil, mainly from Malaysia and Indonesia, which produce more than 90 percent of global supplies.
Soybean oil supplies were affected by the two-year drought in Argentina and Brazil due to La Nina, while Ukraine, which accounts for 76 percent of global sunflower oil exports, cut its supplies last year.
The disruption of alternative oil supplies - sunflower and soybean oil fuelled a rally for palm oil from Indonesia.
Despite the product’s price increase, the retail sales of edible oils continue to grow as cooking oil is a major part of a household shopping basket for use in the kitchen, with its price lower than premium oils such as sunflower and olive oil.
The edible oil market in Kenya is expected to grow at a compound annual rate of 13.37 percent in revenue and 4.75 percent in volume in the forecasting period 2023-2028, according to market intelligence firm Research and Markets.
Kitui Flour Mills said the growth rate in retail volume sales of edible oils would also remain robust throughout the review period, aided by population growth, urbanisation, and post-pandemic economic recovery.
