KENYA – PZ Cussons, a personal and homecare conglomerate, has sold its Ushindi soap brand to Mombasa based Pwani Oil Products for US$1 million (KSh107 million), following competition from cheaper imports.
The Competition Authority of Kenya (CAK) said it had approved the deal, underlining the trend where multinational consumer firms have been selling their products to home grown rivals.
Pwani Commercial director Rajul Malde said that the firm will, following the purchase, now upscale the production and distribution of Ushindi line of products which includes bar soaps and laundry detergents.
He said the deal involved purchase of the Ushindi brand only and machines that manufacture the product.
“We will boost the Ushindi product portfolio and improve its distribution and availability across the country,” Mr Malde said.
PZ Cussons owns personal care brands like Imperial Leather brands, Carex, Cussons Baby, Flamingo, Venus as well as home care range that include morning fresh.
The firm is a public listed company on the London Stock Exchange and has been doing business in Africa for more than a century.
Pwani Oil, the maker of Fresh Fri cooking oil, also owns a range of skincare and soaps like Sawa, Diva Glycerine and Detrex.
Mr Ramesh Kanji Malde together with his brothers, Anil and Naresh Malde, began Pwani Oil Company production of coconut oil in Mombasa.
The operations expanded at the Jomvu Pwani Oil Products factory with corn and sunflower manufacturing before settling for palm oil refining in 1985–a site which Pwani Oil Product are still located at till today.
Toilet soap makers in Kenya have recently stepped up the battle for control of the local market with increasing consumer choices and lowering of prices.
Production of soap, like that of many other fast-moving goods, has come under intense competition from cheap, sometimes counterfeit, products. As a result, a number of companies have closed shop, moving to other jurisdictions.
Blaming high production costs, Reckitt Benkiser, Procter & Gamble, Bridgestone, Colgate Palmolive, Johnson & Johnson and Unilever have all relocated or restructured their operations, opting to serve the local market through importing from low-cost manufacturing areas such as Egypt.
Data from the Kenya National Bureau of Statistics (KNBS) shows that there were 5,270 employees involved in the manufacture of soap and detergents, cleaning and polishing preparations, perfumes and toilet preparations in the country by end of 2018.
This was a slight decline from 5,314 in 2013. In addition, production of soap declined by 16 per cent from 282,730 tonnes in 2011 to 235,227 in 2018.
This as countries in the region, such as Tanzania and Uganda, which used to import Kenyan-made soaps, developed their own industries or began importing from countries such as China.
Imports have, however, picked up during the same period. Imported soaps and cleansing preparations increased more than three-fold from 12,304 tonnes in 2009 to 42,929 tonnes by end of 2018.
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