Company turns nuts to fuel creating wealthy farmers

Over 1500 farmers in Laikipia are earning a tidy income by supplying nuts from the croton canopy tree to a company that produces organic fertilizers and biofuels from the nuts, in ana arrangement that has given the farmers alternative and guaranteed sources of income in the face of dwindling yields from traditional crops in the area.

Eco Fuels Kenya produces organic fertilisers and biofuel from the nuts of the Croton megalocarpus canopy forest tree. The tree is naturally abundant in equatorial East Africa, but the commercial potential of the Croton nut is largely untapped. “We squeeze oil out of the seed which has a lot of different uses including replacing diesel fuel in certain engines, curing leather and making soaps. However, the oil makes up only 10 percent of what we are doing,” said Myles Lutheran, a director at social enterprise Eco Fuels Kenya,. “The remaining 90 percent of the nuts we collect become organic fertiliser, and due to growing demand for organic fertilisers and the necessity for Kenyan farmers to adopt more sustainable farming practices that is the primary opportunity for our business.”

The company produces 25 tons of fertiliser per month and plans to increase its monthly output to 75 tons by the end of the year. The company’s two products, EcoGrow and EcoGrow Plus Neem, were recently certified by the East Africa Organic Product Standards (EAOPS).

“The number of certified organic farmers in Kenya has doubled to 70,000 in three years according to available data. Due to the lack of certified fertiliser inputs, these farmers have been forced to use their own compost for fertiliser which is a timely process and may deprive their crops of certain nutrients. Thus, there is a big opportunity for us to supply that certified growers market with a ready-to-use product and help farmers get better yields while making a stronger case for more certified organic growing.”

Eco Fuels Kenya sells its products to more than 20 export-focused corporate farms and hundreds of local small-holder horticulture farmers in central Kenya. Organic farmers traditionally sold to export markets, but in recent years demand in urban centres such as Nairobi has been increasing. This, Lutheran says, is likely to attract more farmers.

“The number of organic farmers markets and organic only restaurants is increasing in Nairobi. There is a rising middle class that is starting to mimic western countries in a lot of ways, including the greater consciousness of caring about what they eat. It is still all very early stage here in Kenya, but it is happening faster because of easy access to information through the internet other media.”

Lutheran adds that Kenya’s market is also attractive because legislators and farmers now recognise that overuse of chemical fertilisers has depleted the country’s soils and contributes to poor yields. Eco Fuels Kenya is hoping to expand its market by encouraging farmers to supplement its chemical fertilisers with organics. Despite the potential, Lutheran says making sales is “an uphill climb” because Kenya’s is not yet an established market for organic farming like Uganda and Tanzania.

“Turning the need for organic fertiliser into a demand for product is a timely process. You can talk to almost any farmer and they are very keen on organic, they know the benefits and they know why chemicals are bad, but they still do not just switch all of a sudden from chemicals to organic fertiliser without visible evidence of the fertilisers’ results which often means three to four months trials and another two to three months to close sales after that.”

The US entrepreneur says working on the startup is “very satisfying” as it helps farmers adopt sustainable farming practices and generate income for collectors of the Croton nuts. However, like many startups, Eco Fuels Kenya is doing what “no one has ever done before with limited resources”, so the path is a difficult one.

“The business problems you have here in East Africa, especially at the early stages, are unlike the ones you would have in western markets. For example, a meaningful amount of our investment capital in 2013 unpredictably went to maintaining vehicles, simply due to a lack of ability to find a suitable mechanic in our county,” says Lutheran.

“When you consider that East Africa doesn’t have the same early-stage investment culture as the US and raising seed funding is already an incredible challenge, an unforeseen but necessary expense such as this can drastically slow down your ability to invest in the parts of the business that drive sales growth.”

Lutheran previously worked with multiple venture-backed startups in the US, including a clothing manufacturer and a mobile app startup, before relocating to Kenya at the start of 2013 to join the Eco Fuels Kenya team. “The draw for me to come here was the opportunity of building an impactful company in East Africa which turns a naturally-occurring waste material into 100% organic products.”

He adds that the opportunity “to do something meaningful” is attracting more young graduates from western countries to start social enterprises in Africa.

“Overwhelmingly what you see in the US is people who have long careers, they make enough money but they are not satisfied because there is a lack of meaning in the process. It’s very easy to get stuck into those systems where every year you are just hoping for the next pay rise and you are working on something that you’re not passionate about. A lot of people who come here care a lot more about what they are doing with their time, and, due to the nature of absolute poverty in East Africa [compared to relative poverty back in the US] you have a chance to do something meaningful for a lot of people without being reliant on donor money.”