The Competition Authority of Kenya (CAK) has granted approval to Delmonte to fully acquire Mananasi Fibre Limited (MFL), giving the fruit processor full control of the pineapple value chain.
In a public notice on Monday, the Authority said the transaction has received a clean bill of health as it is unlikely to fuel negative competition, as well as due to its low likelihood of eliciting negative public interest concerns.
Merging parties whose combined turnover or assets, whichever is higher, is over Sh1 billion, are required to seek CAK’s approval prior to implementation of the deal.
CAK says the referenced transaction met this threshold for mandatory notification and full analysis as provided for in the rules.
MFL specialises in waste management, particularly, the transformation of pineapple waste into valuable products, with its major activities including fibre extraction, compost production and biochar manufacturing.
Biochar is a carbon-rich stable solid that’s used to improve water quality, reduce soil emissions of greenhouse gases and reduce soil acidity as well as irrigation and fertiliser requirements.
While MFL specialises in composting using pineapple plant remains, its products compete with other commercial compost products made using different raw/organic materials.
While issuing the approval, the CAK said that the transaction will enable Delmonte to bring on board a pineapple waste disposal solution.
“Pineapple cultivation generates significant waste, including leaves, stems, peels, pulp and discarded fruits, much of which is traditionally burnt, contributing to air pollution and greenhouse emissions. Fibre extraction provides a sustainable alternative by processing waste leaves into textile-grade fibres,” wrote CAK.
“The demand for pineapple fibre is growing as a sustainable and eco-friendly alternative to traditional textile, leathers and materials in the motor industry. In Kenya, the market is still emerging with few key players, including MFL, Pine Kazi and Eco Nasi.”
CAK further noted that following the merger, MFL's market share will not change since the seller will exit and the buyer will enter the market, thus the structure and concentration of the markets for textile grade pineapple fibre, compost production and biochar production will not be affected.
"The integration of operations and subsequent scaling up of production are likely to create additional employment opportunities for both skilled and unskilled workers."
