Pearl Dairy, the Ugandan-based manufacturer renowned for its Lato milk brand, is poised to establish a permanent presence in Kenya with the recent approval of its expansion plan, entailing the acquisition of a plant located in Nyamira.

Having leased Highland Creamers and Food Limited since 2020 for the processing of their Lato brand in Kenya due to export restrictions imposed by Kenyan authorities in 2019, Pearl Dairy is now set to assume full ownership of the processor following the green light from the Comesa Competition Commission.

Last year, Pearl Dairy formally applied for the acquisition of Highland Creamers & Food Limited as part of its initiative to bolster its footprint in Kenya.

The approval from both the Comesa Competition Commission (CCC) and the Competition Authority of Kenya (CAK) now sets the stage foe heightened competition with other established players such as New KCC and Brookside.

Notably, Pearl Dairy submitted the acquisition notification through Maziwa, a non-operating holding company incorporated in Mauritius.

In its notification to the CCC, Pearl Dairy highlighted that the move would establish a dual-country manufacturing setup, thereby streamlining turnaround times for customers and enhancing value-addition in both Kenya and Uganda.

The trade dynamics between Kenya and Uganda, particularly in the milk sector, have been historically complex, with Nairobi imposing restrictions on dairy imports from Uganda following complaints from local farmers.

In 2019, Kenyan farmers voiced concerns over the influx of low-cost Ugandan milk, which led to a significant drop in milk prices to as low as Ksh19 per liter. However, prices have since rebounded, with the same quantity now fetching over Sh35.

The expansion by Pearl Dairy comes as a major development in the regional dairy industry, promising increased competition and a potential low price for consumers.

gandae@businessdayafrica.org