KENYA – Capwell Industries, the Kenyan milling company that specializes in high quality flour, rice pulses and porridges is investing US$9.99 million in a wheat flour plant as part of its expansion strategy into the market.
The company is bracing for competition in the lucrative flour milling industry in Kenya indicating plans to introduce more products in the market.
The Kenyan maize and wheat flour market is forecast to grow strongly 7.3% over the next five years attributed to changing consumer preferences for wheat flour, improving retail accessibility, and increasing market sophistication drive demand.
Prior to the investment, the company has been building new plants to increase capabilities in production of maize mill, baking, porridge flours, pasta and milled rice.
It is reintroducing wheat milling after discontinuing its wheat flour brand, Best Cook some years back it produced through contract manufacturing, reported Business Daily.
“We shall be commissioning the new wheat plant in June,” said Rajan Shah, Capwell chief executive officer.
The new plant, equipped with pre-cleaning equipment and a storage silo with a capacity of 15,000 tonnes will have a daily tonnage of 250.
To target the middle social class and achieve a better competitive edge against Unga Ltd’s Hostess brand, the company introduced premium maize flour in the market, Amaize.
Stiff competition is coming from Unga, who sells its brand Jogoo, cheaper flour that targets low income consumers, just like Capwell’s Soko.
Unga plans to commission a new wheat mill plant at its Eldoret facility plus another production line as it seeks to improve efficiency in milling to meet growing demand and cut down on production cost.
Upgrading the facility will ensure a daily milling capacity of 300 tonnes as opposed to the current capacity at 250 tonnes in a day.
These companies are embarking on a strategy to upgrade and installing new machineries at their facilities to reap from the wheat and maize flour market expected to reach US$1.15 billion and US$444 million respectively by 2020.