Business Daily (Nairobi)
Allan Odhiambo
9 October 2009
Nairobi — Regional oil firm KenolKobil is eyeing more strategic acquisitions to grow its market share in Burundi where it has started product sales after taking over a subsidiary business.
"Kobil Burundi SA is focusing on growing its market share in Burundi market to an estimated 10 per cent within the next one year or so," it said in a statement adding that it had confidence in the country's business environment.
The company set up shop in Burundi in a 100 per cent take over of top oil marketer, Oil Burundi SA, previously owned by Engen International Holdings -- the largest brand in South Africa and which belongs to the Malaysian multinational Petronas.
The deal could provide KenolKobil with a reliable fuel supply chain from Durban where Engen runs a refinery.
"Kobil Burundi SA is focusing on growing its market share in Burundi market just like in Rwanda, where we have grown our business from one service station to over 43 and a market share of 35 per cent ," the company said.
Kobil Burundi SA is the seventh member in the KenolKobil Group of companies, a position that has seen the parent firm have a presence in all member countries of the East Africa Community (EAC) that is eyeing a common market protocol next month and have it fully operational by January 2010.
The company said it was already selling its products in Burundi and would spread to all parts of the country through its newly-acquired retail outlets and reseller dealings with independent service stations.
"With the acquisition successfully completed, Kobil Burundi is now focusing on growing its network in the retail market and is looking for opportunities to invest and expand its network to increase its impact and visibility," said Mr Patrick Kondo, the group mergers and acquisitions manager.
The company was previously exporting white products and lubricants to Burundi and the Great Lakes Region through Tanzania.
Mr Kondo said they would continue with their "Move-South-Strategy" and were expecting its subsidiary-- Kobil Zimbabwe-- whose purchase agreement was recently concluded, to start operations soon.
In the Zimbabwe deal, Engen Petroleum Limited in September signed a sale and purchase agreement to jointly acquire all the shares in Shell Zimbabwe (Private) Limited and BP Zimbabwe (Private) Limited.
The acquired entities were previously operated by BP on behalf of the joint venture which marketed under both the BP and Shell brands in Zimbabwe.
With the transaction, Engen and KenolKobil boasted to have acquired the best developed assets in the oil industry in Zimbabwe, consisting of more than 75 service stations spread across the country and several depots, in Harare, Bulawayo, Mutare, Gweru and other major towns.
Market analysts see KenolKobil's expansion forays as being driven by an urge to cushion itself from over-reliance on the Kenyan market, where trading margins have been thinning out with the entry of more independent players.
KenolKobil formally changed its name in June following the successful acquisition of the entire assets of Kobil by Kenol after an approval by shareholders in 2007.
Prior to the acquisition, the two companies operated under a joint management agreement, and were two separate entities, with Kenol being a public listed company and Kobil being a private entity incorporated in the US.
Be the first to Write a Comment!
Copyright © 2009 Business Daily. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.
AllAfrica aggregates and indexes content from over 125 African news organizations, plus more than 200 other sources, who are responsible for their own reporting and views. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica.
