Consumer goods manufacturer Unilever East Africa is set to acquire a 70-acre piece of land in Kiambu’s Tatu City, setting the stage for its Sh17 billion expansion plans.
The producer of OMO detergent and Blue Band margarine said it had signed an agreement with the property developer to buy the land for hundreds of millions of shillings, with the exact price undisclosed.
The multinational is now expected to build a new factory in the location in the medium term, replacing the current plant it has operated at Nairobi’s Industrial Area for decades.
This will be part of the Sh17 billion investments in Kenya announced by its global chief executive Paul Polman last year.
READ: Unilever to invest Sh17bn in Kenya factory
Marc Engel, Unilever chief executive for East Africa, said in a statement: “This investment demonstrates our commitment to Kenya’s sustainable growth as the hub of our operations in East Africa.
“We are also very proud to be associated with the Tatu City urban development and Kiambu County, which is an ideal location for Unilever’s longer term strategic growth plans.”
Unilever’s Kenyan factory produces a wide range of products for the local and regional market, with the planned new factory meant to boost capacity to keep up with rising demand in these markets.
Unilever estimates the current demand for its products in East Africa at 80,000 tonnes a year, spanning cooking fats, sauces, beauty and personal care categories.
This is, however, expected to grow by 40 per cent over the next four years, informing the expansion plan.
In Kenya, Unilever leads in the sauces, dressings and condiments segment through brands like Knorr and Royco, according to a market intelligence report by research firm Euromonitor. The firm is third in the oils and fats category with an estimated market share of 15 per cent, trailing Kapa Oil (24 per cent) and market leader Bidco Oil Refineries (46 per cent).
Unilever’s Blue Band margarine is the leading overall oils and fats brand in Kenya, followed by Bidco’s Elianto corn oil, according to Euromonitor.
The land acquisition marks the latest investment by Unilever in Kenya, with the multinational having recently opened a new Sh155 million production line at the existing factory.
The new line is set to double the production of its Vaseline petroleum jelly. Unilever has also announced plans to relocate its offices from Industrial Area to Watermark Business Park in Karen early next year.
For Tatu City, the sale of land to Unilever brings it closer to realising its plan of building an industrial park as part of the Sh240 billion mixed use real estate development that has been hit by shareholder wars.
“We welcome this very strategic decision by Unilever in choosing Tatu City as the company’s destination of choice for expansion in East Africa,” said Stephen Jennings, founder and CEO of Tatu City’s majority shareholder Rendeavour.
Unilever now Joins Thika-based Bidco, which acquired a 78-acre piece of land at Tatu City where it plans to build warehouses and factories.
SOURCE: BUSINESS DAILY