The Competition Authority of Kenya (CAK) has granted unconditional approval for the establishment of a joint venture between Amstel Trading Company Limited and Kingsbourne Assets Limited, aimed at bolstering Kenya’s photocopy paper market. The decision, announced on August 5, 2024, follows a thorough analysis of the potential impacts on competition and public interest.
Amstel Trading, a Kenyan firm specializing in importing photocopy paper from Indonesia, will join forces with Kingsbourne Assets, a British Virgin Islands-based investment company with expertise in pulp and paper production. The proposed joint venture (JV) will set up a local paper-converting facility, marking a significant shift in the Kenyan market.
The CAK’s assessment found that the transaction is unlikely to negatively affect market competition or raise public interest concerns. According to the authority, the merger will not substantially reduce competition, as the combined market share of the JV will be approximately 15% in the national market for printing and photocopying papers. This share is relatively modest compared to the 85% controlled by other market players, ensuring that competition remains robust.
“The joint venture is expected to enhance the efficiency of paper supply by establishing local production capabilities, which will reduce delivery times and expand distribution beyond Kenya into the East African Community,” CAK stated in its press release.
The move aims to address inefficiencies in the current import-based supply chain. The new JV is set to create job opportunities in Kenya, countering any potential negative impact on employment, as it will initially start with no pre-existing workforce but is projected to generate new positions as operations ramp up.
The merger is also anticipated to contribute positively to Kenya’s manufacturing sector, aligning with CAK’s broader goal of fostering economic growth through enhanced productivity and market access. The authority’s review included considerations of the transaction’s impact on employment, competitiveness of small and medium enterprises (SMEs), and national industries’ ability to compete internationally.
Currently, Kenya’s photocopy paper market is characterized by numerous suppliers importing from Asian countries. Major players include International Paper & Board Supplies Ltd, The Paper House of Kenya Ltd, and Transpaper Kenya, among others. With the market valued at KES49.3 billion in 2023, Amstel and Kingsbourne’s combined presence represents a notable, but non-dominant, share.
