KENYA – Kenyan-based Kitui Flour Mills, the maker of the ‘Unga wa Dola’ wheat and maize flour brand, has entered the cooking oil market as part of a diversification strategy, Capital News has reported.
The edible oil will be manufactured at its Vipingo plant in Kilifi County, spurring the area’s economy.
During the launch, Anwar Bajber, the Kitui Flour Mills finance director said that the move demonstrates the company’s commitment to the Kenyan market as a company rooted in the county for over 50 years.
He also noted that the company is entering a market that is very competitive with brands such as Pwani Oil and Fresh Fry, among others.
“We will continue to invest in and grow with Kenya,” he said, adding that the firm is “keen to continue to identify and pursue opportunities working with our partners and stakeholders,” he stated.
The entry comes amid high commodity prices following a jump in global crude palm oil following the invasion of Russia into Ukraine and export restrictions by the main source country Indonesia, which led to an acute shortage.
Last year, the price of cooking oil in the country hit a record high with a two-liter container of cooking oil retailing at the range of KES572 to KES741.
The shortage prompted the government to include edible oil in the duty-free import commodities intended to create price stabilization for essential household food items.
According to the state, the Kenya National Trade Corporation (KNTC) was supposed to import about 125,000 metric tonnes of finished edible oils to cushion consumers from the high cost of living on increased prices of basic essential commodities.
However, the import plan caused disquiet among manufacturers and food processors who argued that the imports will kill the local industry as it cannot compete with cheap goods from abroad.
In addition, the Kenya Association of Manufacturers (KAM) said that the temporary importation route means the government will stand to lose revenue of up to KS3.5 billion (US$28M) and occasion layoffs of about 40,000 people in the market.
KAM, therefore, called upon the government to seek a long-term solution that includes engaging the sector players
According to Kitui Floor Millers, despite the product’s price increase, the retail sales of edible oils continue to grow as cooking oil is a major part of a household shopping basket for use in the kitchen.
The market intelligence firm Research and Markets also reports that the edible oil market in Kenya is expected to grow at a compound annual rate of 13.37 percent in revenue and 4.75 percent in volume in the forecasting period 2023-2028.
Therefore, for Kitui Flour Mills, the move is timely given that the sector is also expected to remain robust aided by population growth, urbanization, and post-pandemic economic recovery.