NAIROBI, September 29 – Local manufacturing giant Haco industries and Tiger Brands of South Africa are set to formally announce a joint venture on Tuesday.
The South African firm has acquired a 51 percent stake in Industrialist Chris Kirubi’s flagship company through the injection of over Sh250 million.
“Business, invariably, is made successful by the individuals that drive it and who institutionalise certain practices. So we were not just buying into the great range of products (at Haco), we are buying into the people as well,” Tiger Brands Chief Executive Officer Peter Matlare told Capital Business in an interview.
The venture is a culmination of two years of negotiations for a partnership that intends to expand Haco’s product line in the country.
Under the arrangement, Mr Kirubi will remain Chairman of the Board, while Polycarp Igathe will continue serving as Managing Director.
“Some of my colleagues (from Tiger Brands) will sit on the Haco board and will make a contribution at a strategic level. We already have had a group of Haco staff coming to South Africa to spend time within some of our training and institutional programs,” Mr Matlare said.
He continued: “That’s how you begin to build ties, you must never worry that one day you will wake up and not see Haco but see something else, absolutely not! This is Haco country.”
Mr Matlare explained that the Tiger brands investment in Haco was a ‘beachhead’ strategy into the rest of the African continent where many countries are enjoying higher growth rates than South Africa.
“Tiger Brands’ expansion into the rest of Africa involves choosing credible local entrepreneurial partners, to share risk and leverage Tiger’s own brands off existing businesses that have in-depth local knowledge and management,” he emphasised.
Haco’s market share in the fast-growing and lucrative personal and home care consumer product market segment is expected to grow significantly.
The ambition of the two shareholders is to also expand the number of products that are locally manufactured at Haco’s plants where a local value addition effort is expected to boost employment in Kenya.
Tiger Brands is South Africa’s biggest fast moving consumer goods company and is quoted on the Johannesburg Stock Exchange.
‘The usual business thing is to cry and complain of the competitive heat that our industries are feeling from China and India. The unusual thing is for entrepreneurs to actively seek out partners especially from economies of strength and geographical proximity such as South Africa in readiness for competition,” said Mr Kirubi.
“Business in Kenya must engage and partner with South Africa to enhance competitiveness against Asia and Egypt. It’s a most obvious option that we have for a long time fought off. I have no doubt my venture with Tiger Brands at Haco will show the way,” he asserted.
Haco Industries is a leading player in the branded consumer goods market in East Africa with market leader products such as BIC Ballpen, BIC Razors, TCB and Motions Hair care products, Jeyes Bloo Toilet Cleaners, So-Soft Fabric Softener, ACE Bleach and Haco Pegs & Rulers.
Matlare is in the country to engage in various strategic meetings with Haco while meeting with various government officials.