Mauritian company buys out Rongai transport firm
Monday March 06 2023
Mauritian conglomerate Rogers Group has acquired Rongai Workshop & Transport Limited through one of its subsidiaries Velogic Logistics as part of its regional expansion strategy.
The multinational did not disclose the value of the transaction which has seen the exit of the Vanessa Evans family which founded the logistics firm in Rongai in 1947.
“In this context, the group’s international development strategy is particularly relevant, with the recent acquisition of Rongai Workshop & Transport Ltd in Kenya, a buoyant market for the logistics sector,” Rogers said in a statement.
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“This acquisition will allow Velogic, a subsidiary of Rogers, to strengthen its presence on the African continent, while benefiting from the growth prospects of this buoyant market.”
The multinational said the buyout will strengthen the market position of its logistics subsidiary Velogic which has been present in Kenya since 2016.
Rongai Workshop & Transport is the second-largest road transport company in terms of regional destinations served, the multinational said.
The trucking firm has tea companies among its top clients and runs a fleet of 160 vehicles besides employing 270 people. It reported sales equivalent to Sh220 million in the quarter that ended in December 2022.
“Synergies with Rongai will allow Velogic … to offer a greater range of logistics services, as well as expand its customer base and transport network in this region of the African continent,” Rogers said.
Other major trucking firms in the country include Anwarali and Brothers, Bollore Logistics, Acceler Global Logistics, Siginon Group and DHL.
The top logistics firms own hundreds of trucks, with a few running fleets of more than 1,000 trucks.
Kenya is a major transport hub, offering an import and export link from the Port of Mombasa to the regional market. Some of the destinations for local trucking companies include Kampala, Kigali, Bujumbura, Goma and Juba.
The start of cargo operations by the standard gauge railway (SGR) in 2018 took away substantial business from truckers, with the government forcing importers and exports to use the rail service for a period of time.
This led to a reduction in rates charged by truckers, with some of the heavily indebted companies closing shops. New registration of heavy commercial trucks in Kenya fell 21.3 percent to 1,639 units in 2019 from 2,083 units the previous year according to official statistics. They rebounded to 2,382 units in 2020 but still trailed the peak of 2,829 units recorded in 2016.
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Road transport however remains a major means of delivering goods, including to wholesalers and retailers.
Economic growth in the East African market is projected to increase significantly over the medium to long term, creating demand for truckers as the volume of exports and imports grow.