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Key Points
- AIIM is eyeing a controlling stake in Incorp Limited, enhancing its portfolio in East Africa’s logistics and grain handling sectors.
- A recent court ruling has ended GBHL’s monopoly at Mombasa Port, allowing new competitors and increasing efficiency in Kenya's grain logistics market.
- AIIM manages $2.8 billion across Africa, focusing on high-growth infrastructure investments to address food security and optimize supply chains in the region.
South African fund manager African Infrastructure Investment Managers (AIIM) is considering acquiring a controlling stake in Incorp Limited, which manages the grain and port operations of Mombasa-based tycoon Mohamed Jaffer. This move is part of AIIM's strategy to expand its investments in African infrastructure, particularly in logistics.
Incorp Limited includes key subsidiaries such as Bulkstream Limited and Grain Bulk Handlers Ltd (GBHL), which have historically led grain handling at the Mombasa Port under Mohamed Jaffer.
However, Jaffer faced challenges earlier this year when a Court of Appeal ruling ended GBHL's 24-year monopoly at the port, allowing for the establishment of a second-grain handling facility. This ruling represents a significant shift in Kenya's grain logistics market, increasing competition and potentially affecting service efficiency and costs for milling companies.
AIIM targets high-growth markets in Africa
AIIM manages $2.8 billion in assets and operates in South Africa, Nigeria, Kenya, and Côte d'Ivoire, solidifying its position as a major player in African infrastructure investment.
The firm has a strong track record, with eight infrastructure funds across various sectors, including transport, energy, and logistics. Its interest in Jaffer’s Incorp Limited underscores AIIM's focus on high-growth infrastructure markets, especially in East Africa, where port operations and grain logistics are vital for regional trade.
These acquisition discussions come on the heels of GBHL's launch of a major grain-handling terminal in Embakasi, Nairobi, over a year ago. The terminal was designed to enhance grain logistics from the coast to Kenya’s inland hub, improving efficiency for millers and manufacturers by reducing transport costs and alleviating bottlenecks.
Despite recent challenges at Mombasa Port, the Embakasi Grain Terminal positions GBHL as a key player in the grain handling sector, responding to Kenya’s growing demand for efficient food supply chains.
Mombasa grain market faces new players
Mohamed Jaffer’s GBHL has dominated grain handling at Mombasa’s key port for nearly 30 years, a critical hub for East African trade. However, a recent legal ruling to open the sector is set to challenge GBHL’s market share. The entry of a second grain handler will foster competition, potentially improving services for millers and lowering prices for consumers.
For AIIM, acquiring Incorp Limited is crucial as strategic infrastructure investments are essential to tackle rising food security issues and enhance supply chains across Africa. A successful investment would give AIIM interest in Kenya’s grain handling and port operations, solidifying its role as a major infrastructure investor on the continent.
As AIIM reviews Incorp’s operations, industry observers anticipate that its expertise in infrastructure will introduce efficiencies and innovations in Kenya’s grain logistics. For Jaffer, new capital and management insights could help him navigate a more competitive market.
Kenya’s grain handling sector is at a turning point, with AIIM's potential involvement signaling new growth and transformation opportunities. Local and international stakeholders are closely watching these developments, as AIIM's interest in Incorp represents a broader shift in the management and development of African infrastructure assets to meet the continent's demands.
