19 MAY 2021

Kakuzi Reiterates Plans To Continue Supporting Avocado Smallholders

Kakuzi PLC confirms plans to strengthen its Avocado smallholder base as part of a shared prosperity business plan.

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.

Speaking during the Nairobi Securities Exchange (NSE) listed firms 93rd Annual General Meeting held virtually, Kakuzi PLC Chairman Nicholas Ng'ang'a said the firm will this year invest more than KSh. 400 Million in capital expenditures (CAPEX) while focusing on upscaling its smallholder operations value to complement its production capacities and boost the global positioning of Kenyan avocados. It's critical that the markets only receive good quality fruits from Kenya, and to achieve this, building knowledge of the market requirements amongst farmers is very important, Mr Ng'anga said.

Strategically the Company with a 2,500 strong workforce, he said, continues to invest in developing its core crops 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 and hope that further exciting opportunities to diversify our 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, shareholders unanimously voted for a KSh. 18 dividends per share, representing a 28.5% growth from the KSh. 14 dividends paid out the previous year and making Kakuzi PLC one of the best performing return on investment firms at the NSE. 

"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."

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.

Notwithstanding the global Covid19 pandemic challenges, Kakuzi's development strategies, Ng'ang'a said, remain firmly on track to complete the firm's agricultural expansion and diversification projects and advance the sustainability journey. "I am pleased to report that the pandemic did not force us to lay off any staff member, in-fact our employee numbers increased, and we were able to also honour our Collective Bargaining Agreement (CBA) Commitment with the Kenya Plantations and Agricultural Union to further increase wages," he said.

Last year, Kakuzi, Ng'ang'a disclosed, had further achieved a milestone in its pursuit of corporate governance excellence by publishing its first Environment, Social and Governance (ESG) Report. "As a Board, we acknowledge that such processes are a critically important journey where one strives to reach new standards continuously. The next ESG report will be published later on this year," he assured.

As part of the sustainability and governance journey, Kakuzi has developed an Operational-Level Grievance Mechanism (OGM) to enhance the timely and sensitive resolution of grievances that any of its employees or stakeholders may have with the firm.

The development of the new operating policies and the adoption of globally benchmarked standards, Ng'ang'a said, is part of its commitment to adopt the highest standards possible protocols in its operations.

"The OGM is fully compliant with UN Guiding Principles on Business and Human Rights and will be a fair, transparent and independent means to resolve any complaints connected to Kakuzi's operations. The Board is also working to establishing a high-level Independent Human Rights Advisory Committee (IHRAC) whose role will be to provide independent advice to the Board on matters relating to governance structures and Human Rights," Ng'ang'a said.

As part of our employee and community health promotion programme focusing on preventative health services, Kakuzi last year employed a team of 13 Public Health Officers to assist in protecting its 2900 strong workforce from COVID-19. The team is tasked with interacting with workers, performing health checks, and providing invaluable advice on compliance with public health regulations within all the Company's housing and processing units daily.

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 Kes. 848 million pre-tax profit representing a 16% drop from Kes. 1,014 billion realized the previous year.

Kakuzi's avocado and macadamia export volumes were higher than 2019 but not sufficient to mitigate a significant reduction of 34% in the price of avocados due to higher global supply.

Share article