Mumbai, Sept. 4: Reliance Industries Ltd (RIL) has acquired a majority stake in Gulf Africa Petroleum Corporation (Gapco) for an undisclosed sum.

Mauritius-headquartered Gapco is in the oil retail business, managing storage terminals and operating distribution networks in countries of central and east Africa such as Tanzania, Uganda and Kenya.

The company operates more than 250 outlets in retail and industrial segments.

Reliance’s acquisition was made through a wholly owned subsidiary, Reliance Industries Middle East, Dmcc, registered in the UAE.

The company said it was a “strategic” acquisition but did not reveal the size of the deal.

A Reliance official said strong growth rates in the countries where Gapco operates was the main reason for the acquisition. “When there is strong growth in a country’s GDP, it directly leads to good growth in demand for petroleum products,” the official said.

The retail outlets will also provide an assured market for Reliance’s Jamnagar refinery.

In the absence of a level-playing field in the domestic market, Reliance is focussing on exports.

It is now the country’s largest petroleum exporter, with its products being sold in Europe, Latin America, North America, the Far East and Africa.

Though Reliance has been linked to many global buyouts, it is only the second such acquisition by the company.

The company had bought German specialty polyester maker Trevira GmbH three years ago.

A Reliance statement said that east African countries had demonstrated rapid economic growth and had progressive government policies in place.

Demand for petroleum products in these countries is rising steadily and has fuelled rapid growth in the gross domestic product.

Import of petroleum products is also expected to rise in the future. These markets are also easily accessible from India, providing a strategic fit for exports.

Reliance has a refinery at Jamnagar in Gujarat. Group company Reliance Petroleum Limited is also setting up an export-oriented refinery at Jamnagar.

Though a small player in Kenya with a market share of 1.85 per cent, Gapco is a major player in Tanzania, Uganda and Sudan.

In Tanzania, Gapco has an estimated 35 per cent of the market, which it got after acquiring Esso and Caltex, while in Uganda it has a 12 per cent market share, acquired through the buyout of Esso assets.