NYSE-listed Kellogg’s plans Kenya entry with eye on the rich

KENYA – New York Stock Exchange-listed foods manufacturer, Kellogg’s, is set to enter the Kenyan market.

KENYA – New York Stock Exchange-listed foods manufacturer, Kellogg’s, is set to enter the Kenyan market.

The company, whose sub-Saharan Africa business is headed by former EABL managing director Gerald Mahinda, is also tipped to open a production plant to serve the East African market.

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Kellogg’s, with an asset base of more than $15.7 billion (Sh1.4 trillion), sells its food products in 180 countries across the world.

It produces breakfast cereals, snacks, cookies, cornflakes and brands such as Mueslix, Pringles potato chips and Eggo waffles.

In Kenya, the company Pringles potato crisps, Rice Krispies, Fruit Loops, Coco Pops and Frosties. The demand for ready-to-eat cereals has been rising in tandem with the country’s elevation to a middle-income economy as per re-based GDP figures released last year.

People familiar with Kellog’s planned entry into the market say it is currently finalising regulatory approvals before making a formal announcement.

The company is also exploring opportunities of entering through a joint venture with a local investor.

“The focus is to tap opportunities in the East African market and use Kenya as the central avenue to deepen its products’ penetration in the region. The operations are set to start early this year given the company has made good progress in terms of regulatory aspects,” said the source who sought anonymity before the official launch.

In February last year, Kellogg’s appointed Mr Mahinda as its head for the sub-Saharan Africa business.

Mr Mahinda was by then managing director for London-based alcohol manufacturer Diageo’s Africa spirits transformation unit that spearheaded sales of spirit brands across the continent.

He is currently based in South Africa and is tasked with driving Kellogg’s growth plan of capturing a larger share of the breakfast spend for Africa’s middle-class households across sub-Saharan Africa.

“I see an outstanding opportunity for Kellogg’s to grow in Africa and felt energised by the team when I met them,” Mr Mahinda told the Business Daily on his appointment.

Kellog’s entry into Kenya comes at a time when Proctor and Allan East Africa Ltd, a breakfast cereals maker, has announced that it is constructing a plant in Limuru to increase its production.

The company said the expansion was driven by increased demand for its products. Other rivals Kellog’s will encounter in the local market include Weetabix, Nestle and Mondelçz, (formerly Kraft Foods).

Kellogg’s reckons that increased urbanisation and changing lifestyles in Africa has created demand for its breakfast cereals.

January 25, 2015; http://www.businessdailyafrica.com/Corporate-News/Kellogg-s-plans-Kenya-entry-with-eye-on-the-rich/-/539550/2601940/-/5m3hygz/-/index.html

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