UGANDA – Uganda’s prominent milk processing firm, behind the popular Lato brand, is poised to acquire Kenyan milk company Highland Creamers & Food Limited in a strategic move to overcome challenges in the Kenyan market and establish a manufacturing base in the country.

Maziwa, the non-operating holding company incorporated in Mauritius and a subsidiary of Pearl Dairy Farms Limited, has applied to the Comesa Competition Commission to acquire a 100% stake in Highland Creamers & Food Limited, the producer of the Family Milk brand based in Kisii, Kenya.

The transaction, subject to regulatory approval, aims to enable Pearl Dairy Farms to enhance its presence in the Kenyan market by utilizing Highland Creamers & Food Limited’s operations for the collection, processing, packaging, and sale of UHT long-life milk and yogurt.

The acquisition will allow Pearl to overcome supply chain challenges, reduce turnaround time to customers, and increase value-addition in both Kenya and Uganda.

While the financial details of the deal remain undisclosed, the move aligns with Pearl Dairy Farms’ broader strategy.

In April, the company secured a US$35 million loan from the International Finance Corporation, with plans to allocate US$21 million for upgrading and expanding its powder milk plant in Uganda and acquiring a packing plant in Kenya.

The proposed acquisition comes as a strategic response to trade disputes and supply disruptions that have, at times, hindered the entry of Lato brand products into Kenya.

Establishing a manufacturing base in Kenya is expected to enhance Pearl’s ability to navigate these challenges effectively.

The Comesa Competition Commission notice invites comments on the proposed deal, emphasizing that the acquisition will foster a two-country manufacturing setup, enabling Pearl Dairy Farms to tap into the separate milk pools in Kenya and Uganda.

This strategy aims to facilitate local market growth without dependency on imports from other nations.

Pearl Dairy Farms, based in Mbarara, Uganda, introduced the Lato milk brand in 2012 and is owned by the Midland Group.

The company has been actively expanding its market reach, with international markets including Egypt, Kenya, Tanzania, and the Democratic Republic of Congo, in addition to its presence in Zambia, Ethiopia, South Sudan, and Malawi.

The acquisition is in line with Kenya’s decision in March to welcome foreign investment in local dairy factories. Pearl Dairy Farms signed an agreement with the State-owned financier Kenya Development Corporation to jointly invest in local dairy ventures, further solidifying its commitment to the Kenyan market.