By George Munene
Speaking during the Nairobi Securities Exchange (NSE) 93rd Annual General Meeting, Kakuzi PLC Chairman Nicholas Ng’ang’a said the firm will this year invest more than Sh400 million in capital expenditures (CAPEX) focusing on upscaling the value of its smallholder avocados farmers’ operations.
“The global market is responding positively to Kenyan avocados due to their high potential to provide good quality fruits but, we must work tirelessly to secure this market positioning by focusing on the quality aspects,” Ng’ang’a said. He added that “to secure this market positioning, Kakuzi will step up its effort to strengthen the capacity of our smallholders to meet the stringent quality and phytosanitary standards required at the global markets.”
At the virtually held event, Mr. Ng’ang’a pointed out that focusing on lifting its smallholder farmers’ value would complement its production capacities and boost the global positioning of Kenyan avocados.
“It’s critical that markets only receive good quality fruits from Kenya, and to achieve this, building knowledge of the market requirements amongst farmers is very important,” he said.
The Company he added has secured lucrative markets for Kenyan agriproduce such as avocados and macadamia and will continue adopting a shared prosperity approach by integrating smallholders.
Alongside the smallholder avocado development plans, the integrated agro-business firm is focusing on developing its other core agribusiness lines; macadamia, forestry and cattle while experimenting with the new blueberry venture.
The firm’s chairman added that they are exploring value addition opportunities in a number of these crops.
“The markets for Kakuzi’s avocados remained solid, despite the almost complete closure of the food retail sector across our main markets. 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,” Ng’ang’a said.
Related News: Global avocado demand projected to double by 2024.
At the AGM, the firm’s shareholders unanimously voted for a Sh18 dividend per share, representing a 28.5 per cent growth from the Sh14 dividends paid out the previous year and making Kakuzi PLC one of the best performing returns on investment firms at the NSE.
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 Sh848 million pre-tax profit representing a 16 per cent drop from Sh1,014 billion realized the previous year.
The firm’s avocado and macadamia export volumes were higher than 2019 but not sufficient to mitigate a significant reduction of 34 per cent in the price of avocados due to higher global supply.