Firm also invests heavily in quality assurance commitments
Kenyan integrated agro-business firm Kakuzi PLC will this year invest more than Ksh400 million in capital expenditures.
Speaking during its 93rd annual general meeting held virtually, Kakuzi Chairman Nicholas Ng’ang’a said the firm will use smallholder farmers to complement its production capacity and boost the global positioning of Kenyan avocados.
“It is critical that the markets only receive good quality fruits from Kenya, and to achieve this, building knowledge of market requirements among farmers is very important,” Mr Ng’ang’a said.
Alongside the smallholder development plans, the firm is focusing on agricultural production expansion and diversification projects for its macadamia, blueberry, livestock and commercial forestry business lines.
The company is listed on the Nairobi Securities Exchange (NSE) and has a 2,500-strong workforce. Ng’ang’a said the firm continues to invest in developing its core areas of avocado, macadamia, forestry and cattle, and experimenting with the new blueberry venture. “Investments in technology to reduce our environmental footprint and enhance our product quality are also progressing well.”
He added that the firm is also exploring value addition opportunities in a number of these crops in the hope that further exciting opportunities to diversify the company’s income stream will present themselves when fully appraised.
“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.
At the AGM, the firm’s shareholders unanimously voted for a Ksh18 dividend per share, representing a 28.5 per cent growth from the Ksh14 dividend paid out the previous year and making Kakuzi one of the best performing return-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 Ksh848 million pre-tax profit representing a 16 per cent drop from Ksh1.014 billion realized the previous year.
The firm’s avocado and macadamia export volumes were higher than for 2019 but not sufficient to mitigate a significant reduction of 34d per cent in the price of avocados due to higher global supply.
Meanwhile, Kakuzi has received an unconditional renewal of its GLOBALG.A.P. version 5.2 certificate following a recent audit of its production and processing procedures. GLOBALG.A.P. (Good Agricultural Practices) is a private-sector body that sets voluntary standards based on Good Agricultural Practices for certifying agricultural products around the globe.
The GLOBALG.A.P. certification, a Global Food Safety Initiative (GFSI) benchmarked standard, allows Kakuzi to produce avocados to access the European market with a recognised mark of quality issued by NSF Certification Ltd, a UK-based certification body.
Speaking when he confirmed the GLOBALG.A.P. certification renewal, Kakuzi Managing Director Chris Flowers said the firm invests heavily in its quality assurance commitments. The firm’s investments in quality management systems, he said, continue to pay off as independent audits undertaken by NSF Certification assure that Kakuzi food has been produced, prepared, and handled according to the highest possible standards.
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