Ramco Plexus giant packaging supplier in Kenya takes full ownership of Platinum Packaging

KENYA – Ramco Plexus, the print and packaging unit of Kenya based Ramco Group, has received unconditional regulatory approval to take full control of Platinum Packaging in a transaction that sources estimated at about Ksh500 million (US$4.30m).

Platinum Packaging is one of the largest gravures and digital printed flexible packaging company in the Eastern and Central African region, serving the fast-moving consumer goods (FMCG), food and beverage and agrochemical sectors among others.

It supplies flexible packaging solutions in reels, pouches, digital labels and sleeves.

Meanwhile, Ramco Plexus oversees operations in more than a dozen subsidiaries dealing in printing and packaging business under the Ramco stable.

The Competition Authority of Kenya (CAK) has allowed Ramco Plexus to buy out the 50 percent stake held by Carton Manufacturers in the packaging and labelling firm. The remaining 50% stake is held by Ramco Plexus, reports Business Daily.

“The proposed transaction involves the acquisition of sole control of Platinum Packaging by Ramco Plexus, resulting in a change from joint control to sole control,” said the CAK in a note approving the transaction.

“The parties combined value of assets is over Ksh1 billion and therefore meets the thresholds for a full merger notification as provided for in the Merger Threshold Guidelines under the Competition (General) Rules, 2019.”

Kenya’s competition law requires that firms in merger undertakings, which have combined assets or turnover of at least Ksh1 billion (US$8.60m), to seek approval from the CAK before executing the deal.

Platinum Packaging, which runs stores countrywide, controls a seven percent share in Kenya’s crowded market for flexible packaging and labelling products. This places it among the joint market leaders in the industry dominated by family-owned enterprises.

The other joint market leaders in the industry are Packaging Industries Ltd, Statpack Industries Ltd and Texplast Industries Ltd, according to the competition watchdog.

Even though the merged entity will have more than Ksh1 billion in assets, it will still control less than 10 percent market share.

“Whereas the acquirer has control of the target, the parties’ market share will not change. Additionally, the merged entity will face competition for the other market players controlling 93 percent of the market as well as from imports and players.

“Premised on the foregoing, it is the Authority’s view that the proposed transaction is unlikely to substantially lessen or prevent competition in the flexible packaging market in Kenya,” CAK ruled.

Other holding companies under the Ramco stable include Ramco Altus whose interests is in manufacturing, Ramco Oritsu focused on services and trading, Ramco Kora dealing with office supplies and Ramco Ekon specializing in building materials.

Liked this article? Subscribe to DealStreet Africa News, our regular email newsletter with the latest news, deals, and insights from Africa’s business, economy, and more. SUBSCRIBE HERE

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.