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Homecare giant PZ Cussons sells soap brand to local firm

By Dominic Omondi | August 8th 2020 at 00:00:00 GMT +0300

PZ Cussons is the latest multinational company to offload one of its key brands as cheap imported detergents eat into the once-lucrative market.

The personal and homecare conglomerate will sell its Ushindi brand to Pwani Oil Products, following in the footsteps of other multinational companies that have sold some of their products to local competitors.

In a Gazette Notice dated June 24, the Competition Authority of Kenya (CAK) announced the acquisition of Ushindi by the Mombasa-based manufacturer.

“Pursuant to the provisions of section 46 (6) of the Competition Act, 2010, it is notified for general information that in exercise of the powers conferred upon the Competition Authority by section 46 (6) (a) (ii) of the Competition Act, (CAK) has authorised the proposed transaction as set out herein,” said CAK Director General Wang’ombe Kariuki.

Ushindi is a multipurpose soap for both personal and homecare use.

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Two years ago, Pwani Oil announced the acquisition of Rainbow detergent soap brand from Match Masters as it sought to grow its market share in the fast-growing segment.

Unilever, an Anglo-Dutch conglomerate, also offloaded some of its brands including Cowboy, Kimbo, Veebol and Tiger to Bidco as local companies begin to gain an edge in the market.

Homegrown rivals

More recently, Unilever Kenya’s dominance of the homecare and beauty products market has come under severe attack from homegrown rivals such as Bidco, Interconsumer and Haco Industries.

Production of soap, like that of many other fast-moving goods, has come under intense competition from cheap, sometimes counterfeit, products.

As a result, a number of companies have closed shop, moving to other jurisdictions.

Blaming high production costs, Reckitt Benkiser, Procter & Gamble, Bridgestone, Colgate Palmolive, Johnson & Johnson and Unilever have all relocated or restructured their operations, opting to serve the local market through importing from low-cost manufacturing areas such as Egypt.

Data from the Kenya National Bureau of Statistics (KNBS) shows that there were 5,270 employees involved in the manufacture of soap and detergents, cleaning and polishing preparations, perfumes and toilet preparations in the country by end of 2018.

This was a slight decline from 5,314 in 2013. In addition, production of soap declined by 16 per cent from 282,730 tonnes in 2011 to 235,227 in 2018.

The value of exported soap also declined from Sh8.2 billion in 2011 to Sh5.1 billion by end of 2018, according to data from KNBS.

This as countries in the region, such as Tanzania and Uganda, which used to import Kenyan-made soaps, developed their own industries or began importing from countries such as China.

Imports have, however, picked up during the same period. Imported soaps and cleansing preparations increased more than three-fold from 12,304 tonnes in 2009 to 42,929 tonnes by end of 2018.

PZ Cussons Ushindi Pwani Oil
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