Centum Tightens Grip on Almasi, Plots Takeover

Centum Investment Company (ICDC) now owns 53.8% of Almasi Beverages, a privately held Coca-Cola brand bottling company. Almasi’s rights issue to raise funds for expansion provided Centum the opportunity to increase its stake in the soda maker.  Centum has hinted it could take over Almasi in the future.

Industrial Commercial Development Corporation (ICDC), government agency and one of the largest institutional investors in Centum, also increased its stake in Almasi by taking advantage of the rights issue. The combined stakes of Centum and ICDC in Almasi has now risen to 90% of Almasi, making it easy for Centum to take full control of the company when it decides to make the move.

Strong demand for Almasi shares
Almasi sought to raise Ks1 billion from the rights issue but ended up with Ks1.6 billion, with Centum contributing Ks1 billion. Centum has invested Ks3.6 billion in Almasi in two years, CEO James Mworia recently disclosed. The investment allowed Centum to gradually tighten grip on the soft-drink company. Centum’s earlier stake in Almasi before the rights issue was 50.95%.

The investment in Almasi speaks volumes of Centum’s view of the future of soda market in Kenya. Soda sales have been shrinking in developed markets amid growing consumer health awareness and fears that too much soda consumption could cause obesity and other health complications. But it appears market for soda remains strong in emerging markets like Kenya, leading Centum to double down on investment in Almasi. Kenya’s soft-drink market is estimated at Ks100 billion annually.

Centrum is also a large investor in Almasi’s main rival Nairobi Bottlers, another privately held company. Almasi controls 29% of Kenya’s soft-drink market. Besides soda, Almasi also produces bottled drinking water and it is in the process of expanding its water production capacity.

Almasi is the parent company of Kisii Bottlers Limited, Rift Valley Bottlers Limited and Mount Kenya Bottlers Limited. These companies earlier operated as independent Coke bottlers but decided to merge to consolidate their market share and fend off competition. Almasi also owns a bottle manufacturing plant in Nyeri.

Centum's other holdings

Besides Almasi, Centum is a controlling shareholder in multiple privately held companies including lender Sidian Bank. Centum also owns a controlling stake in Nairobi Securities Exchange listed publisher Longhorn Kenya Ltd (LKL).
 

Centum stock rose 1.25% to close at Ks40.50 on Wednesday, November 23, 2016. The stock is up 3.18% for the month but down 13% year-to-date. Centum is a component of Kenya NSE 20 Index, the benchmark index of Nairobi’s top 20 largest, most actively traded and most liquid stocks.