Funguo Investments Limited has acquired a majority stake in Feastfoods Processors Limited, a food processing company that has been set up to manufacture fruit juice puree and concentrates in Kwale County.
The value of the project is Sh1bn, and the funds for the first phase have already been availed. The transaction will see FIL, one of the country’s leading investment companies own 51 per cent stake of Feastfoods, a company set to produce puree and concentrates of mango, pineapple and passion from locally grown fruits, mainly from Kwale County as well as other counties in the Coastal and lower Eastern regions.
It is estimated that about 65 per cent of puree concentrate is usually imported. The completion of the transaction is subject to regulatory approvals.
‘’We’re sure this is going to be a success because there’s a ready market for fruit concentrates both locally and internationally,’’ said Funguo Investments Limited CEO Mr Kenneth Muchina.
The establishment of the Feastfoods factory is in partnership with Feastfoods Processors Limited and will in part be funded by a long term debt of Sh276m from ICDC, part of Sh425m that is already available in the first phase.
ICDC is the development finance institution owned by the Government of Kenya. Feastfoods is expected to directly employ over 50 employees and provide a market for over 30,000 farmers in the coastal county who often suffer losses for lack of a ready market for their fruits.
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They will in the early years supply Feastfoods with mangoes, passion fruits and pineapples, with a likelihood of other fruits and even vegetables and nuts being added to the portfolio of farm produce that Feastfoods will process.
“Fruits from the coastal region of Kenya have largely been going to waste with post-harvest waste levels for mango as an example estimated at 55 per cent of total produce. Feastfoods intends to offer a partial solution to this problem by buying from the farmers and processing the fruits to make puree and concentrate to sell to local and export markets juice and other food product manufacturers,” said Kenneth Muchina, Funguo Investments Limited’s CEO.
The acquisition of the stake in Feastfoods by Funguo adds to Funguo’s list of strategic investments that span stakes in Insurance, Insurance Brokerage, Risk and Pensions Consulting, Real Estate, Beverages and Concrete Products.
“We estimate the fruit processing plant will produce about 20 tonnes of fruit puree daily. The entire plant has a processing capacity of 36,000 tonnes per annum,” Mr Muchina explained.
It is expected that the ground breaking for the processing plant will be in three months with the commissioning of the state-of-the-art plant slated for October this year.
Feastfoods joins other businesses in the coastal region of Kenya that leverage on the available market of fruits in the region.
The greatest beneficiaries of this entry in to the fruit buying market by Feastfoods are the farmers who will now have an expanded market for their produce.