Swiss logistics giant Panalpina has completed the buyout of a majority stake in Nairobi-based air freight forwarder Airflo for an undisclosed amount.
The new entity will now be called Airflo Panalpina and will retain the staff of about 160. The Competition Authority of Kenya (CAK) director-general Wang’ombe Kariuki approved the Basel-headquartered listed company’s acquisition of a 75 per cent stake in a gazette notice.
“The acquirer had no turnover for the preceding year, 2014, while that of the target was Sh317,764,392; and the transaction is below the required merger threshold for mandatory notification as contained in the Merger Threshold Guidelines,” said Mr Kariuki in the notice dated January 7 2016.
Panalpina opened its Nairobi office in January 2015 and said it was eyeing East Africa’s oil and gas industry.
This time round Panalpina is looking at entering Kenya’s horticulture export market at a time the oil and gas industry is in a shambles after a huge drop in crude prices.
Economic Survey 2015 estimates that horticulture exports stood at Sh97.1 billion in 2014, a nine per cent increase from Sh89.3 billion a year earlier.
Airflo, which has been in operation since 1994, specialises in packaging and exporting flowers to key markets in Europe and is a subsidiary of the Dutch Flower Group.
The deal with Panalpina is expected to give Airflo access to other markets including the US which will be a boon for local exporters who will have exposure to revenues in dollars.
“Currency has been a big challenge lately for the Kenyan flower growers, especially with the dollar-euro exchange rate.
‘‘We recognise the pressure this puts on our growers. With Panalpina’s global reach we can open up new markets like the US, thereby diluting exposure to single markets and currencies,” said Airflo managing director Conrad Archer when the deal was first announced in December last year.
The listed Swiss firm has over 500 offices in more than 70 countries and a workforce of about 16,000. The acquisition comes hot on the heels of a report that ranked Kenya as one of the top-four African countries with promising logistics and supply chain opportunities.
The 2016 Agility Emerging Markets Logistics Index ranked Kenya behind South Africa and Nigeria but ahead of Ghana and Angola in the list of top five promising African states.
The report that polled 1,100 logistics executives found that low energy costs, investments in infrastructure and the horticulture industry are working in favour of Kenya. Source: Business Daily Africa