Weetabix tempts Pioneer Foods to the table
Pioneer Foods Group Limited has announced it is to acquire a 49.8% stake in manufacturer Weetabix East Africa Limited for an undisclosed amount.
The Kenyan-based company has been in operation for over 40 years and has about 13 brands in its portfolio. Last year, the business invested around $2 million in a capacity upgrade programme at its facilities, giving it 60% more capacity. It is the second JV between Pioneer Foods and Weetabix UK.
Weetabix East Africa produces the number one breakfast cereal in the region and began operating 40 years ago, with the Weetabix range enjoying a significant market share. The company currently exports to Tanzania, Uganda and Rwanda.
Group CEO of Pioneer Foods Phil Roux said: “This acquisition represents a rare opportunity for Pioneer Foods to enter the East African market with a credible partner and a profitable branded business.
“We believe there is strong category growth potential in this market, driven by an emerging middle class as well as by convenience-driven consumer trends. The per capita consumption of breakfast cereals in Kenya suggests good growth potential, with the added benefit of accelerating growth in neighbouring countries.”
Says Giles Turrell, Group CEO of Weetabix UK: “The business will provide a platform to introduce the wider Pioneer Foods basket, through an established and well developed route-to-market in Kenya and neighbouring countries.”
The acquisition offers Pioneer Foods, which owns brands including Liqui-Fruit, Bokomo and Sasko, the opportunity to build a significant breakfast position in the region by targeting consumption growth of Weetabix whichis available in one in every three outlets in Kenya.
Sales revenue for Weetabix East Africa saw a compound yearly growth rate of 14% between 2011 and 2015.
The transaction is subject to Kenyan regulatory approvals, which is standard for a transaction of this nature.