KENYA – Kakuzi PLC, a Kenya based agricultural company, has announced a half-year pretax profit of Kshs 507 million (USD 3.93 million), driven by a recovery in global demand for macadamia nuts and avocados.
The company’s financial performance underscores the resilience of its agricultural operations despite ongoing challenges in the sector.
Kakuzi’s Managing Director, Chris Flowers, attributed the positive results to a buoyant international avocado market, where demand has outstripped supply.
“The global avocado market has been favorable for us, primarily due to reduced production in key exporting countries like Peru and Mexico,” Flowers explained. The company’s avocado exports grew by 42%, generating Kshs 951 million (USD 7.37 million), up from Kshs 670 million (USD 5.19 million) in the same period last year.
The macadamia division, which had previously faced losses, has also returned to profitability. Kakuzi recorded a Kshs 32 million (USD 247,895) profit in this segment, a significant turnaround from a Kshs 329 million (USD 2.55 million) loss in the previous year.
Flowers noted that global demand for macadamia nuts has recovered to near pre-pandemic levels, which has positively impacted the company’s earnings.
Kakuzi’s sustainable wood products division also posted impressive results, with divisional profits rising by 54% to Kshs 71 million.
The growing demand for quality-treated posts and construction materials has boosted this segment of the business. “Our customers recognize the value of sustainably grown wood products, which has fueled demand in this area,” Flowers said.
In a strategic move to diversify its markets, Kakuzi entered the Indian avocado export market earlier this year.
The company is also exploring opportunities in Malaysia as part of its broader business development strategy.
This diversification is seen as a buffer against potential market disruptions, particularly given the geopolitical challenges affecting traditional export routes.
Kakuzi’s Board Chairman, Nicholas Ng’ang’a, highlighted the impact of the political situation around the Red Sea on the company’s operations.
With major shipping lines rerouting around the Cape instead of through the Suez Canal, transit times for Kenyan avocados have increased, leading to some quality issues. “These challenges underscore the critical need to explore new markets,” Ng’ang’a remarked.
Despite these challenges, Kakuzi remains committed to promoting Kenyan superfoods in both traditional and emerging markets.
The company is also focused on expanding its domestic market presence, particularly through its Kakuzi Farm Market initiative. “Our Farm Market has become a hub for local entrepreneurs and has significantly boosted our product sales,” Flowers noted.
Looking ahead, Kakuzi plans to continue expanding its avocado orchards and arable operations to meet the growing demand for its products. The company has already added 60 hectares to its avocado orchards at a cost of Kshs 120 million (USD 929.606).
With global demand for superfoods on the rise, Kakuzi is well-positioned to capitalize on these opportunities.
This announcement follows the Kenya Revenue Authority’s report that fruit exports, driven primarily by avocados, have overtaken coffee as the country’s top revenue generator.
Earnings from fruit exports reached KES 20.41 billion (USD 157 million) in the first half of 2024, underscoring the increasing importance of the avocado industry to Kenya’s economy.
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