Kenya’s competition watchdog has approved KEDA Ceramics’ acquisition of certain assets from Ramoda Ceramics, a move set to revitalize local tile production and create 500 jobs.
The Competition Authority of Kenya (CAK) has given the green light for KEDA (Kenya) Ceramics Company Limited to acquire key assets from Ramoda Ceramics Limited, consolidating KEDA’s position in Kenya’s ceramic tile market. The unconditional approval comes as Ramoda, part of the Ramco Group, faced liquidity challenges that led to the closure of its operations.
“The proposed transaction involves KEDA’s acquisition of certain assets of Ramoda relating to the business of manufacturing, distributing and selling ceramic tiles,” the CAK stated in its decision. These assets include properties, plants, and various categories of machinery and equipment.
The deal is expected to increase KEDA’s market share from 25% to 31%, still below the threshold for market dominance as defined by Kenyan law. The CAK noted, “The transaction is unlikely to negatively impact competition in the market for ceramic (floor and wall) tiles, nor elicit negative public interest concerns.”
Kenya’s ceramic tile market has been experiencing significant growth, driven by rapid urbanization and a booming construction industry. According to research cited by the CAK, Kenya’s annual consumption of ceramic tiles is approximately 40 million square meters, with an average annual growth rate of 8%.
However, domestic production has lagged behind demand. The Kenya Association of Manufacturers reports that the country produces about 12.40 million square meters of ceramic tiles annually, meeting only 43% of local demand. This gap has necessitated substantial imports, which currently account for 38% of the market.
The acquisition is expected to have positive implications for employment in the sector. “The transaction is likely to positively impact employment following reopening of Ramoda’s mothballed manufacturing plant. This will create approximately five hundred (500) direct job opportunities, significantly contributing to the local and national economy,” the CAK reported.
This development comes at a time when Kenya’s government has been pushing for increased local manufacturing capacity. The ceramic tile industry, with its ties to the construction sector, is seen as a key area for growth and import substitution.
While KEDA strengthens its position, it will continue to face competition from other significant players in the market. SAJ Ceramics holds a 12% market share, while Goodwill Ceramics commands 15%. The remaining market is fragmented among smaller manufacturers and importers.
