East Africa witnesses growth in confectionery market

Bharat Shah, the Vice Chairman of confectionery maker Kenafric Industries, sees big opportunity in Kenya’s decision to lead integration of regional markets, especially for manufacturers that are taking advantage of low manufacturing capacity in regional economies.On Tuesday, his company, invested 110 million U.S dollars in new production machine. The machine, which makes range of chewing gums, will increase the company’s annual production of confectionery from 1,500 tonnes to 8,000 tonnes. For Shah, there is no risk for dead stock because “demand for confectionery is very high and growing in all countries we operate,” he said in an interview with Xinhua in Nairobi on Tuesday. “We see our growth being driven by regional expansion. We are now waiting for the grand free trade area to be realised in 2014 so that by 2020, we shall be operating in 20 African countries while in 2030, we plan to be operational in 30 countries,” said Shah.The grand free trade area is expected to result in the mergers of the EAC, the Common Market for Eastern and Southern Africa (COMESA) and Southern Africa Development Cooperation (SADC). The new free trade area will incorporate 26 countries and increase market access for Kenyan companies tremendously. But even locally, data shows that confectionery market has been increasing in the last ten years to 2010, with opinion divided on the direction of the market at least by 2015. So far Kenafric Industries and other confectionery companies in the region, its is not really an investment to nowhere. The underlying statistics indicate that Kenya is one of Africa’s most promising confectionery markets. Even as a starting point, most of the ingredients that enable ease of doing business in Kenya are becoming better or are expected to become better in near future, headlined by massive investments in renewable energy that will not only reduce the cost of electricity but make its more reliable. Xinhua

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East Africa witnesses growth in confectionery market