KenolKobil Acquires in Burundi…

KenolKobil has signed a Sales and Purchase Agreement to buy the entire shareholding of Oil Burundi S.A., which is owned by Engen International Holdings (Mauritius) Limited. Through the signing of the purchase agreement, KenolKobil has effectively established its sixth subsidiary outside Kenya, Kobil Burundi S.A., with the others being Kobil Uganda, Kobil Tanzania, Kobil Rwanda, Kobil Zambia and Kobil Ethiopia.

The newly-acquired outfit is the leading distributor of Lubricants in Burundi, supplying to several key commercial customers, and therefore provides an ideal platform for the company to grow the market share of its Kobil Lubricants brand. The outfit has also been engaged in the supply of white products to independent service stations in Burundi.

At the same time, the company has acquired all the three (3) service stations branded SONITRA in Burundi – two of them in Bujumbura and the other in Kanyaru, towards the border with Rwanda.

Prior to these acquisitions, KenolKobil has been exporting white products and lubricants to the market, and the new subsidiary opens up further supply opportunities through Tanzania. The Tanzanian supply corridor has in recent times been the most reliable and effective route that oil marketing companies have been relying on for supplies to Uganda, Rwanda, Eastern Democratic Republic of Congo due to the Refinery and Pipeline and Storage unreliable distribution performance in Kenya, and is set to develop even further.

Owing to the KPC problems, limited capacity in the KOSF, non-availability of products in Western Kenya and poor performance of Kenya Petroleume Refinery , Burundi like others , has shifted most of its imports to Dar. In establishing this subsidiary, KenolKobil intends to enhance its use of the Tanzanian facilities to supply Burundi.

In this acquisition, KenolKobil completes its presence in the East African Community (EAC) trading block. Through the new acquisition, Kobil Burundi has acquired the rights to import, store and distribute products in the only depot in Bujumbura, SOCIETE D’ENTREPOSAGE PETROLIER AU BURUNDI (SEP Burundi) Depot. Kobil Burundi will further enhance the KenolKobil Group’s to the South Eastern Democratic Republic of Congo, through the towns of Kigoma and Uvira.

As was the case in Rwanda which was established from scratch to a market leader with over 35% market share, the Group has a lot of confidence in its new investment in Burundi, and is on the look-out for more growth opportunities in that country, both through organic growth and through acquisitions and buy-offs when strategic opportunities arise. Here is the company’s statement to the NSE.