Kakuzi Plc to strengthen business with earmarked US$3.7m capital injection

KENYA – Kenyan integrated agri-business firm, Kakuzi Plc, has announced that it will invest more than Ksh400 million (US$3.7m) in capital expenditures (CAPEX) this year, to expand production and upscale its smallholder operations value, in a bid to boost the global positioning of Kenyan avocados.

Other than boosting production and market for its core crop avocado, the fresh food producer and exporter has indicated it will continue to invest in diversification projects for its macadamia, livestock, commercial forestry business lines and experimenting with the new blueberry venture.

This was revealed by the newly appointed company Chairman Nicholas Ng’ang’a, highlight that, the firm is gearing on with its technological advancements, aimed to reduce environmental footprint and enhance product quality.

He added that the company is also exploring value addition opportunities in a number of crops and hopes that further exciting opportunities to diversify its income stream will present themselves when fully appraised.

Last year, Kakuzi achieved robust results for the year, despite the uncertainty in its main sales markets caused by the COVID-19 Pandemic.

The firm posted a Ksh. 848 million (US$7.8m) pre-tax profit representing a 16% drop from Ksh 1.014 billion (US$9.3m) realized the previous year.

Its avocado and macadamia export volumes were higher than 2019 but not sufficient to mitigate a significant reduction of 34% in the price of avocados due to higher global supply.

The company notes that its markets remained solid, despite the almost complete closure of the food retail sector especially in Europe due to the pandemic and the temporary ban of the produce following claims of human rights abuse to its workers.

“We expect that there will be some recovery in 2021, but this is not guaranteed. To mitigate this, we continue to trade with our traditional buyers as well as some key new players across 14 different countries.

“It’s critical that the markets only receive good quality fruits from Kenya, and to achieve this, building knowledge of the market requirements amongst farmers is very important,” Ng’ang’a said.

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To secure this market positioning, Kakuzi has indicated it will step up its effort to strengthen the capacity of its smallholders to meet the stringent quality and phytosanitary standards required at the global markets.

To this end the agricultural firm recently launched the free fruit maturity testing service to be utilized by all farmers for the current harvest period.

Notwithstanding the global Covid19 pandemic challenges, Kakuzi’s development strategies remain firmly on track to complete the firm’s agricultural expansion and diversification projects and advance the sustainability journey.

“I am pleased to report that the pandemic did not force us to lay off any staff member, in-fact our employee numbers increased, and we were able to also honour our Collective Bargaining Agreement (CBA) Commitment with the Kenya Plantations and Agricultural Union to further increase wages,” he said.

Last year, Kakuzi achieved a milestone in its pursuit of corporate governance excellence by publishing its first Environment, Social and Governance (ESG) Report.

“As a Board, we acknowledge that such processes are a critically important journey where one strives to reach new standards continuously. The next ESG report will be published later on this year,” he assured.

As part of the sustainability and governance journey, Kakuzi has developed an Operational-Level Grievance Mechanism (OGM) to enhance the timely and sensitive resolution of grievances that any of its employees or stakeholders may have with the firm.

The development of the new operating policies and the adoption of globally benchmarked standards, Ng’ang’a said, is part of its commitment to adopt the highest standards possible protocols in its operations.

The OGM is fully compliant with UN Guiding Principles on Business and Human Rights and will be a fair, transparent and independent means to resolve any complaints connected to Kakuzi’s operations.

The Board is also working to establishing a high-level Independent Human Rights Advisory Committee (IHRAC) whose role will be to provide independent advice to the Board on matters relating to governance structures and Human Rights.

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