Indian multinational buys Kenyan Aliyana hair care products maker
Ladies get their hair done in a salon: The Kenyan beauty product market has attracted a number of high profile acquisition deals in the past few years. PHOTO | FILE
What you need to know:
This is the third Kenyan beauty firm Godrej has invested in.
Godrej did not indicate the amount it has paid for the remaining share of Charm, which is based on Mombasa Road, Nairobi.
Disclosures by Godrej indicate that Charm made Sh188.7 million for the 2015/2016 financial year. On its part, the Indian firm had a turnover of Sh66.3 billion ($650 million) in the first half of 2016.
Indian fast-moving consumer goods (FMCG) conglomerate Godrej Consumer Products has completed the takeover of Kenyan firm Charm Industries, makers of the Aliyana brand of hair care products. This is the third Kenyan beauty firm Godrej has invested in.
Godrej already held 51 per cent of Charm but in a notice made to the Bombay Stock Exchange and the National Stock Exchange of India — where it is listed — the firm says it has acquired the remaining 49 per cent. The Indian firm says it will increase the range of products offered by Charm locally.
Godrej did not indicate the amount it has paid for the remaining share of Charm, which is based on Mombasa Road, Nairobi.
“The exchanges are hereby informed that the company (Godrej) has increased its stake from 51 per cent to 100 per cent in Charm Industries Ltd…the entity will scale up wet hair care business in East Africa using Strength of Nature brands,” said Godrej chief financial officer V. Srinivasan in the statement to the BSE and NSE India.
“The consideration is payable in cash. In view of confidentiality, the amounts are not disclosed.”
Disclosures by Godrej indicate that Charm made Sh188.7 million for the 2015/2016 financial year. On its part, the Indian firm had a turnover of Sh66.3 billion ($650 million) in the first half of 2016.
Africa accounts for close to a third of Godrej’s international sales, and the company says it plans to consolidate its business in the continent where it has operations in South Africa, Nigeria, Kenya, Tanzania, Zambia and Mozambique.
The Kenyan beauty product market has attracted a number of high profile acquisition deals in the past few years, with companies looking to stake a claim in an industry that is estimated to be worth Sh23 billion by 2018.
The consumer goods segment in Kenya has been one of the fastest growing in Africa, fuelled by an expanding middle class.
Godrej in March took up an additional 39 per cent in Style Industries — maker of popular hair products Darling and Amigos — bringing its total holding to 90 per cent in the firm.
The value of the deal was also not disclosed. Style Industries also makes hair additions such as braids, weaves, extensions and wigs. The firm operates from Nairobi and Ruiru.
In February, Godrej bought a 75 per cent stake in Canon Chemicals, makers of Valon Petroleum Jelly. Mlolongo-based Canon, which has been operating in Kenya for more than 40 years, recorded revenues of Sh1.15 billion in 2015.
Godrej said it would use Canon Chemicals to expand its brand offerings to include air fresheners and baby-care products.
In January, Nairobi Securities Exchange-listed FMCG firm Flame Tree Group acquired local beauty product firm Suzie Beauty for Sh45 million, with the deal coming just a few months after the company bought four beauty brands from Beauty Plus Trading East Africa, all for an undisclosed amount.
In 2013, L’Oréal, one of the top global cosmetic companies, purchased InterConsumer Products, the makers of the Nice & Lovely range of hair and beauty products, in a deal estimated to be worth billions.
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