Vivo Energy staff. [Photo/businessdaily]
Vivo Energy is now firmly on course to become Kenya’s biggest oil marketer after acquiring the business of its relatively smaller competitor Engen in a deal announced last week.
Already, Vivo has a slight edge in petroleum sales with 19.1 percent market share against KenoKobil’s 19 percent and Total’s 15.7 percent according to market data published by Petroleum Institute of East Africa (PIEA).
With the acquisition of Engen pushing it just one percentage point behind KenolKobil, Vivo is now a breath away from achieving its ambition of market leadership position.
A look at the changes in the market position in PIEA data shows that Vivo has been gaining market share quarter on quarter and the firm could easily overturn the table standing at the current tempo. For example, by end of 2016, Vivo market share was 12.4 percent and was ranked third behind KenolKobil with 15 percent and Total’s 12.9 percent.
But the gains in market share that Vivo has been making have not been at the expense of either KenolKobil or Total. In fact, KenolKobil market share has also been on the rise at almost the same rate with Vivo. KenolKobil moved from 15 percent market share in December last year to 17.7 percent in June this year.
However, the Total market share has weakened from 12.9 percent in December 2016 to 12.8 percent in June this year.
In spite of Vivo’s growing muscle in the local petroleum industry, the Engen acquisition was received with mixed reactions.
A look at the performance of energy stocks at the Nairobi Securities Exchange over the four days since the deal was announced on December shows that investors were not moved by the deal which will increase Vivo’s market share by one percent.