COMPANY FEATURE: Kenchic Limited – Enabling shared prosperity through sustainable Food Production

Kenchic is on a transformative journey to become a diversified provider of a wider range of food products, with a renewed sense of purpose on the impact of the business on its customers, farmers and other stakeholders in the food value chain, notes Jim Tozer, the Managing Director

 The Covid-19 pandemic may be in the rear-view mirror for many – but for Jim Tozer, the Managing Director at Kenchic Ltd, the Nairobi-based company best known for its day-old chicks and processed chicken products – the pandemic has changed him and the business immensely.

 New to the Managing Director’s role from his earlier role as head of operations for the firm as the pandemic was announced in early March 2020, he remembers taking a hurried flight back to Kenya from the UK, just before the borders were shut to contain the spread of the pandemic across the World.

 The uncertainties and upheaval brought by the pandemic during those early months of 2020 has in many ways changed the way businesses are and will operate in future, notes Jim. “The world has changed forever since Covid-19. Businesses had to relook at who they were, what they were doing and from that, we recognized that actually we were able to do more with less – maybe too much fat had grown in the business. It was a massive ask from our senior team as well as everybody else throughout the organisation.”

 He adds that at that point, communicating the right message to the entire team at the company became priority to him and his senior management team, considering the changing dynamics and to ensure that everyone stayed on course. “I went to everyone in the company – every individual affected – and told them exactly what was happening and what we needed to do, and it was really amazing how they stood up to be counted. We saw productivity begin to creep up, we did come back from the bad situation and by the end of the year, things were looking good for us.”

 The pandemic opens new perspectives

 “The pandemic not only changed how we manage the business by also unearthed my purpose, as well,” Jim discloses. “I was brought up on a small little farm in the UK. I recognized my love for food production and the opportunity and when I came to Kenya way back in 1992, it was very clear to me that there were great opportunities in agriculture here and also to help people. I have unearthed that. Whereas I have always been involved in business, the last three years have been what I may call a cathartic process, and digging deeper into me as a person has changed me immensely,” he exclaims.

 “The process has made me dig deep into my inner steel and reserve. I now have a very a much clearer focus than I actually thought I had about the company and the direction it should take, something I had not realized. There is now an inner drive which I have that keeps me and the company on the right path.”

 Operating with purpose for nearly 40 years

 As the leading operator in the poultry value chain in East Africa, Kenchic already boasts an impressive customer base that includes global fast-food outlets, international hotel chains, airline food service companies and leading supermarkets.

 Part of the African Poultry Development (APD), Kenchic is one of the group’s entities operating in the poultry value chain in Kenya, Tanzania and Zambia and has for nearly four decades consistently fulfilled its promise to avail day-old chicks and affordable, nutritious and safe processed chicken products to its customers in Kenya and the region.

 As the business marks the 40^th anniversary in 2024, however, Covid-19 and its aftermath has brought dramatic change in the business and how it operates now and into the future.

 “What is really interesting is that there aren’t many opportunities in life when you learn culture changes in companies. I believe we already had a good culture, but sometimes seismic shifts and hits come to push it even further in one direction or the other. The pandemic was probably a cloud with a silver lining because it meant that I built a very good team here. Everybody within the company knew what was happening and what was expected of them, they recognized life was difficult and they stepped up.”

 Availing safe and nutritious products

 The Food Business Africa team had a rare glimpse into Kenchic’s operations during visits to the breeder’s farm, hatchery, broiler farm and processing plant to showcase the company’s focus on safety, animal welfare and sustainability.

 The company was more than willing to grant us the opportunity to visit the facilities, which are located in various locations around Nairobi and Thika.

 “At Kenchic, we are passionate about producing trustworthy sustainable food. It’s a story we need to tell very clearly because there’s quite a lot of misconception that when you’re a large producer, you are potentially producing it the wrong way.”

 The company has invested millions of dollars in establishing a one-of-a-kind integrated poultry processing infrastructure that allows it to have 100% control over its value chain, from the farms where chickens are bred and raised to the factory where processing is done. It describes this as the “Farm to Fork Journey.”

 “Our Farm to Fork journey starts from the breeder farms, where we obtain the eggs, and continues to the hatchery, where we acquire day-old chicks. These chicks are then raised in our farms and selected contract farmers. The chickens ultimately reach the processing plant, where they are processed into a variety of chicken meat products,” explains Philip Maina, Chief Commercial Officer. “The process is fully integrated, starting from the grandparent stock and extending all the way to the final products.”

 Getting it right from the start to the end

 The company has implemented strict biosecurity measures at the hatchery and brooder farms, specifically aimed at reducing the probability of introducing or spreading any potential pathogens that could harm the birds.

 These measures include locating the farms in low-density areas away from major towns and implementing access restrictions.

The poultry producer does much more than simply provide farmers with healthy day-old chicks. “We also train farmers and teach them how to commercially raise chickens,” Jim explains. “Our training includes classes on constructing a properly dimensioned house, brooding, feeding, watering, as well as disease management and the benefits of vaccination.”

About 20,000 farmers have benefited from Kenchic’s day-old chicks, while it maintains active contact with approximately 6,000 of these farmers. A significant number of the chicks are usually destined for broiler farms owned by Kenchic, which meets 40% of the processing factory’s demand.

 The remainder comes from contracted farmers. Regardless of whether they are raised on their own farms or in out-grower broiler facilities, Jim assures us that all birds are raised according to the Farm Animals Responsible Minimum Standards (FARMS), which are the international guidelines for ensuring the welfare of farm animals.

 The company believes that when administered correctly, antibiotics are crucial for the sustainability of the poultry industry.

 “At Kenchic, antibiotics are only administered under veterinary advice in cases of infection, aligning with good veterinary practices and animal welfare standards,” Philip explains. “This demonstrates our commitment to combating antimicrobial resistance.”

 Moreover, the level and seriousness of the company’s work in reducing and eliminating the use of antibiotics in chicken production in East Africa saw it named by USAID as one of eight organizations, globally, that is leading in transforming farming to avert anti-microbial resistance.

 Fully grown birds are transported to the factory in Thika, Kiambu County. “Our processing plant is one of the most modern in Africa, enabling us to manufacture our products at the same standard as our international counterparts,” adds Philip.

 The firm slaughters the birds at maturity while adhering to global FSSC 22000 and Halal requirements. The chicken is then transferred to the processing area where it is transformed into various products, including chicken meat such as whole chicken and cuts, further processed products.

 Leaving nothing to chance

 Kenchic’s product quality is one of the primary reasons why the company is a key player in the industry. The company demonstrates its commitment to delivering the highest quality products while prioritizing the health and safety of its customers by adhering to various standards.

 In 2011, it attained the Food Safety System Certification 22000 (FSSC 22000) certification and it has been recertified each year since then. “We are always pursuing these internationally recognized certifications because we want to provide consumers with the guarantee that any of our products, they consume is safe and of high quality,” according to Philip.

 An in-house laboratory that is ISO 17025-certified conducts comprehensive tests to ensure the effectiveness of food safety and biosecurity systems, which are implemented throughout its entire value chain. Some of the tests include water analysis to ensure that the water provided to birds is safe for consumption. Additionally, microbiological analysis is conducted on the feed to ensure that it meets the desired nutritional profile for chickens and is free of any pathogens. The labs also rigorously test every batch of chicks and chicken products to ensure that they are free of pathogenic bacteria before being released to the market.

 “We know that implementing these stringent measures has increased our production costs,” Jim remarks. “However, as a responsible business, we firmly believe in not compromising the health and safety of our customers for the sake of quick profits.”

New purpose, more sustainable business

 The company embarked on a full-scale strategic training program in 2022, sourcing a consultant from a top business school in the UK to train its senior executives in Kenya, Tanzania and Zambia.

 From the training, Jim and the team recognized that they could not do anything about strategy and look at new opportunities for the business, before they understand who we were. They therefore carried out research with the help of a consultant involving all their stakeholders – shareholders, staff members, a representative of the government, suppliers and customers – asking a series of defined open questions on what they were good at and what they should do better.

 “Once we distilled that right down, we recognized actually that we did have a purpose in the business, right from nearly 40 years back. Our shareholders had a vision – they recognized that poultry was going to be growing in this part of the world, since they had already seen it kicking off in South Africa and other parts of Africa.

 “Sustainable food was really important and not only would enable them to grow the business, but also there was a grand opportunity to do more. We suddenly realized that we actually had a purpose from the start and that we were enabling prosperity,” exclaimed Jim. “We then had a deeper look at all the other aspects of our business and it became clear to me and the company that it had to be sustainable food production. We have just brought in a consultant who is a sustainability environmental specialist who is in the process of doing a gap analysis on our business to help us in this quest.”

 Towards a more sustainable future, the company has already installed solar panels on the roofs of some of its facilities – where they are able to save up to 25% of their energy requirements, with plans for more such installations in the future.

 New opportunities beyond chicken

 Jim elucidates that as part of the strategic review was the opening of new opportunities for the company to move beyond its traditional poultry business – into a fully-fledged food business operator.

 “Having looked at our purpose and our strategy, we did recognize that we are already in the food market, but why restrict ourselves only to the poultry market? We said that we should have food on the table, literally, as an opportunity to look at. We already know how to do it in one sector, why can’t we buy, merge, develop, build a new business and get into the whole of the food industry? Our new strategy is to look at the opportunities in the food industry into the future – that’s the genesis of the business now – we do recognize who we are now.”

 “Our guiding lights – our Northern Star – is our purpose. Everything that we do in the company today and into the future will be driven by that purpose statement.”

 “That means that we shall make sure that everybody in the company understands what we do. Every department must intimately know each other and what our shared goals will be in the future. I will tell the world because if we do it right, everybody can see the strategy, but to copy it will be something different, because it’s in the DNA of the business. I wanted to lay the foundation that everything we now do in our processes actually is all governed in that direction.”

The company has defined its new purpose: To enable shared prosperity through sustainable food production. Its new vision is to be the food partner of choice. Among its values are team players, commitment, excellence and responsibility.

 Jim was however quick to add that chicken will remain at the heart of the business, considering that across the World, poultry production has exploded because it is a source of cheap, accessible and high-quality protein.

 “Poultry will remain our focus area. The opportunity lies in the fact that we can offer a broader basket of goods. We will produce other proteins and other food products in the same manner we have applied to our chicken business. Poultry is still a massive growth area – only about 1.7 kilos per capita of poultry meat is being eaten in Kenya compared to South Africa’s 40 kilos and in many parts of the world – it can only go one way.”

 Future towards 2030

 As 2030 beckons and the new strategy unfolds, Jim is quite confident of doubling the size of the business – powered by the company’s new purpose and vision.

 “If we do the right things and we look at the whole growth of Kenya and the region and its population, wealth, rising urbanization, the fact is that the market opportunity is immense. I also believe that we must work with the government and explain to them our new purpose to ensure they understand our business and its impact. Further, if we can work together around issues such as raw material supply, an enabling environment for our sector, we could triple the business by 2030.”

 He believes that raw material supply constraints for commodities such as maize and soybean is a big headache in Kenya and that there is an opportunity for better varieties to be grown within the country and to embrace new technology seeds instead of relying on imports from Uganda, Tanzania, Zambia and other countries.

 These countries, according to Jim, also offer great export opportunities, especially if regional trade issues within the EAC and SADC can be harmonized to allow for better cross-country flow of goods and services.

 To tap into new business opportunities, Kenchic recently opened a new hatchery in Uganda – a four-million-dollar investment in a market where they have been supplying day-old chicks for over 30 years.

 Plans are to expand and grow the investments in Uganda in the future and to continue supporting the existing export trade in the Democratic Republic of Congo (DRC). “Ethiopia has opportunities and further south in Malawi, Mozambique as well. When these opportunities arise, we will strategically look at the possibility of growing our footprint, ideally organically, sometimes marked by joint ventures or mergers.”

 More than just chicken

 As demand for convenient food rises, Kenchic has been actively developing new products to tap into this new demand.

 The company recently introduced a breaded chicken range called Crispy Kuku and the Hungarian Choma Sausage, which, according to Philip, are quickly gaining popularity among consumers who desire tasty and convenient foods.

 The company plans to bring more convenient foods in future to ensure consumers can continue to enjoy chicken even as their lives get busier. “We’re even looking at what we call shelf-stable products that don’t need chilling, just ambient temperature,” Jim discloses.

 “Our Farm to Fork journey demonstrates our commitment to trustworthy sustainable food production. Our consumers can continue buying and enjoying our products knowing they are safe and of high quality.”

This feature appeared in ISSUE 59 of FOOD BUSINESS AFRICA MAGAZINE. You can read this and the entire magazine HERE