Chairman’s Statement

93rd ANNUAL GENERAL MEETING

This is our second year living under Covid Restrictions and it is highly regrettable that we are not able to hold this AGM in person. However, I sincerely hope that shareholders will be able to interact with the Company through both the documents provided and the extensive content on our social media pages. There are numerous videos showcasing our operations which we hope you can find some time to listen to.

Within the operations we continue to provide high standard practices to safeguard our employees from this disease. Through collaboration with the Ministry of Health we have also offered the use of our clinics to the Government to facilitate their vaccination program. To date, 400 vaccinations have been administered through these facilities.

Our Community Social Investment programs have been supporting numerous efforts to prevent the spread of this terrible disease including the provision of clean water, hospital ICU beds, Personal Protective Equipment, and more school desks to assist in decongesting classrooms.

The close working relationship with the County Administration has provided a very harmonious working environment and we would like to thank the Administration for all of their support during this period.

As indicated in the Annual Report, our results were robust despite the impact of the pandemic in some of our key overseas markets. From the start of 2020 there were many uncertainties especially surrounding logistics, access to key production and packaging inputs as well as great concerns for the welfare of our employees. I would like to express our gratitude to the many employees, County and National institutions who worked so diligently to keep the economy open thus enabling companies like ours to maintain operations and provide much needed support for the economy.

I am pleased to report that the pandemic did not force us to lay off any members of staff; in fact our employee numbers increased and we were able to also honour our CBA Commitments with the Workers' Union covering wage increases.

As mentioned there have been and continue to be some very fundamental challenges caused by this pandemic, especially in the international markets. Demand for macadamia nuts has reduced as consumers experienced continued social activity restrictions. This remains a concern for 2021 as well.

The demand 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 improvement in 2021 but this is not guaranteed. To mitigate this, we continue to trade with our traditional buyers as well as a number of key new players across 14 different countries. Despite some difficulties caused by repeated partial lockdown, local sales of beef and timber are faring well especially from our own butchery.

The season for blueberry's is about to begin and we will once again sell as much as we can into the local and regional market. There are ever increasing opportunities to expand the product range and for sale of more of our products within the Country rather than relying exclusively on exports. Tea prices remained at similar levels to last year and unless there is a change in the supply demand equation this situation will prevail for some time to come.

Looking ahead, it is impossible to predict how international markets will behave with any degree of accuracy and given the persistent impact of this pandemic such predictions are even more unreliable.

On the wider issues which Kakuzi had to respond to in the last 12 months, the Company continues to deal with the allegations made by the KHRC with the seriousness they deserve and investigations into these are ongoing. As we publicly stated Kakuzi was not party to the litigation which occurred between a UK law firm and Camellia PLC.

We have responded to these allegations in the manner that any responsible company should do. By enhancing our governance standards not only are we able to identify and remedy issues when they arise, but we are also able to demonstrate to our customers that our values meet the highest standards of any agricultural producer.

We further achieved a mile-stone in this journey in 2020, publishing our first Environment, Social and Governance Report. As a Board we acknowledge that such processes are a critically important journey as we strive to continuously achieve new standards. The next ESG report will be published later this year.

Strategically the Company continues to invest in expanding its core crops of avocado, macadamia, forestry and cattle as well as experimenting with the new blueberry venture. Investments in technology to reduce our environmental footprint and enhance our product quality are also progressing well. We are also exploring value addition opportunities in a number of these crops in the hope that this will provide further exciting opportunities to diversify our income stream.

I would like to express our gratitude to you all for our continued belief in our Company and your support and we hope that when we next meet it will be at a much safer time.

 

N NGANGA

18th May 2021