Kenafric is set to be the second-largest manufacturer of stationery products after the competition regulator approved its bid to acquire Economic Industries Limited, overtaking Kartasi Industries, which has been the second most dominant player in the market.
Following the acquisition, Kenafric’s share of the stationery market in Kenya is set to rise from 12.3 percent to 22.6 percent, making it second only to Twiga Stationers, which is currently the market dominant with 49.4 percent market share.
Kartasi, which has been the second top player in the industry with an 18.2 percent market share, has now been relegated to third place, while Guaca Stationers is now the fourth with a 4.73 percent share.
The Competition Authority of Kenya (CAK) unconditionally approved the acquisition of Economic Industries Limited by Kenafric on the premise that it will have no significant impact on rivalry in the industry nor elicit any negative public interest.
“The proposed transaction is unlikely to lead to a substantial lessening or prevention of competition in the market for stationery in Kenya,” the regulator said in a statement following its approval of the acquisition.
“Entry and exit barriers in the market for stationery in Kenya are not high and, therefore, transactions taking place in this market are unlikely to raise competition concerns.”
Other than stationery, Kenafric manufactures polyvinyl chloride (PVC) used to make carpets and tents, ethylene-vinyl acetate (EVA), rubber footwear, soft drinks, confectionery, and culinary products.
Economic Industries Limited, known for the Economic and Falcon brands of exercise books, writing pads, counter books, colouring pencils, and other stationery, is primarily involved in the making and distribution of such products.
After the acquisition, it will exit and liquidate the business, allowing Kenafric to expand its activities in the stationery business in the country. The value of the transaction has not been disclosed.
This isn’t Kenafric’s first acquisition in Kenya. In 2022, the manufacturer teamed up with an Indian food producer to buy out distressed biscuit maker Britania at an estimated value of Sh1 billion.
According to past data by CAK, Kenafric controlled a larger share of the Stationery market in 2022, with 20.9 percent, while Kartasi controlled 9.7 percent, and Twiga – the market leader – had 38.8 percent.
Kartasi, however, grew its share to overtake Kenafric as the second top producer of stationery, while Kenafric’s share gradually slimmed as Twiga also widened its market control.
