Government of Kenya

Dr Sheila Ochugboju
Transformative Science &
Urban Resilience

Agenda

Why Kenya

Why the New Kenya

Why Agriculture in the New Kenya

How Government is Enabling Private Sector Investment in Agriculture

What are the Investment Opportunities

What are the Next Steps for Investors

Investment Potential in Kenyas Agricultural Sector

2014 Grow Africa Investment Forum

Government of Kenya
May 2014

Government of Kenya

Why Kenya?

East Africas Growing Economic Giant

Kenya is the largest economy in the East African Community (EAC) with strong growth prospects
supported by an emerging, urban middle class with an increasing appetite for high-value goods and
services
Strong and Large Regional Player

Growing Consumer Market

Comparative GDP,
Current USD BN, 2012

Kenya GDP USD BN,

2008-2012

*
*
*

*
*

There is a rising trend towards urbanisation which is

contributing to an increase in consumer demand for
high value goods and services
This trend is forecast to continue, with 50% of the
population expected to live in urban areas by 2050

The size of Kenyas middle class is growing as

evidenced by the growth in its GNI per capita, which
has increased at a CAGR of 2% over the past 10
years

Kenya has the second largest population within the

EAC at ~43 MN and is growing at a rate of 2% p.a.

Kenya is the dominant economy in Eastern Africa,

contributing to more than 40% to the regions
GDP
Kenya is likely to be deemed the fourth largest
economy in Africa upon the completion of a review
of its national economic data, which will enable the
country to achieve its Vision 2030 development
objective to become a middle-income country
well before the 2030 target

Urban Population as a % of Total Population,

2009-2012

*
*

Source: World Bank 2014; Economic Outlook Accelerating Growth Faces Significant Headwinds, Business Monitor International, 2014

Why Kenya?

Favourable Investment Environment

Kenyas investment climate is the strongest in the EAC, with FDI flowing in from emerging and developed
markets and a high volume of multinationals with regional and continent-wide headquarters in the country
Positive Investor Sentiment

Multinationals with African1 Headquarters in Kenya

FDI Inflows, USD MN

*
*

FDI has been on the rise and is significantly

stronger than investment in other EAC
countries
Given its position as the economic,
commercial, and logistical hub of East
Africa, private equity capital is now flowing
into Kenya
In 2013, Kenya was the top destination for
international investors in the Eastern Africa
Region after attracting 12 private equity deals
valued at over USD 110.5 million

Recent Landmark Investments

One of the largest greenfield projects in
Africa by Kwale International Sugar Company
for a $200 million sugar processing facility in
Ramisi, due for completion in June 2014
One of the biggest wind projects in Africa, by
Harith General Partners for a $870m wind
project in Lake Turkana

Note: 1African headquarters refers to multinational companies with continent-wide or regional headquarters in Kenya
Source: World Bank; Economic Outlook Accelerating Growth Faces Significant Headwinds, Business Monitor International, 2014; 2013
Investment Client Statement - Kenya, Bureau of Economic and Business Affairs, 2013 ; Private Equity Africa, 2014

Agenda

Why Kenya

Why the New Kenya

Why Agriculture in the New Kenya

How Government is Enabling Private Sector Investment in Agriculture

What are the Investment Opportunities

What are the Next Steps for Investors

Why the New Kenya?

The Government is Thinking Differently

Empowered by a new constitution and administration, the national and county governments are
approaching the private sector as a central partner in the development and growth of the Kenyan economy
A New Approach to the Private Sector
A New Government

Business Environment Reforms

The new Jubilee Administration regards the

private sector as a key centre of economic
and social development and has signalled this
shift in governments orientation through the
divestment of its majority shareholding in
state commercial companies through the
Nairobi Securities Exchange

Kenya is making efforts to lower the cost of

doing business by conducting extensive
business regulatory reforms intended to
substantially reduce the number of licensing
requirements and to make the licensing
regimes more transparent and focused on
legitimate regulatory purposes

Open Market Access System

Devolution into County Governments

Kenya has fully liberalised its economy and

removed all obstacles that previously
hampered the free flow of trade and private
investment, such as exchange controls,
import and export licensing, as well as
restrictions on remittances of profits and
dividends

Empowered by the new constitution,

devolution offers an opportunity for
investment through localised innovation
with scale through collaboration by building
commercial ecosystems in each county that
expand employment opportunities and
empower local communities

Why the New Kenya?

Infrastructure Development is Transforming the Landscape

Kenyas landscape is also undergoing significant transformation as evidenced by commitment of over
USD20 billion towards infrastructure development through public private partnerships
Infrastructure
Infrastructure
Strategy
Strategy

Increasing
investment in
infrastructure
under PPP
arrangements

Key
Key Infrastructure
Infrastructure Development
Development Projects
Projects
Mombasa Port Expansion: Harbour channel deepened by 15m
and widened to 500m to accommodate larger vessels

$366MN

Thika Superhighway: Construction of the eight-lane controlledaccess 50-km NairobiThika superhighway was completed in 2012

$360MN

Konza Technology City Silicon City: IT Hub to be built on

5000 acres of land in Machakos

$14.5BN

Lamu Port Southern Sudan Ethiopia Transport Corridor:

Investments in power and energy infrastructure istaking place

$5.5BN

Standard Gauge Railway: Railway systems around Nairobi,

connecting Mombasa to Malaba/Kisumu to be complete in 2018

$2.6BN

Jomo Kenyatta International Airport Expansion: Construction

of a 178,000sqm facility to be complete in 2017

$360MN

Inland Fibre Network Infrastructure: Expansion of inland fibre

network by operators such as MTN, Safaricom and Telkom Kenya

~$260M
N

Sources: Vision 2030; Ministry of Industrialization; Office of the Deputy President of Kenya; Trademark East Africa

Why the New Kenya?

Africas Hub for a Green, Cost Effective Power Revolution

Kenya is also perfectly positioned to unleash Africas power generation capacity through its focus on green
and cost effective sources of energy, set to contribute to a 5000MW increase in the national power grid
Power
Power &
& Energy
Energy
Strategy
Strategy

Increasing
share of power
generated from
green and more
cost effective
sources, with a
target to
increase
electricity
generation
capacity by
5,000MW from
the current
1,644MW to
6,700 MW in 40
months

Key
Key Power
Power Projects
Projects and
and Recent
Recent Resource
Resource Discoveries
Discoveries
Wind
Wind Power
Power Project
Project

Water
Water Discovery
Discovery

300
300 MW
MW Lake
Lake Turkana
Turkana
Wind
Power
Project
Wind Power Project
valued
valued at
at USD
USD
823MN
823MN

Two
Two new
new water
water sources
sources at
at Turkana
Turkana Basin
Basin and
and
Lotikipi
Basin
holding
250bn
m
of
water,
Lotikipi Basin holding 250bn m of water,
sufficient
sufficient to
to supply
supply Kenya
Kenya for
for 70
70 years
years

Oil
Oil Discovery
Discovery

Turkana
County

Discovery
Discovery of
of reserves
reserves
by
Tullow
oil,
estimated
by Tullow oil, estimated
to
to extract
extract as
as much
much as
as
one
billion
barrels
one billion barrels

Coal
Coal Power
Power Plant
Plant
900
900 -1,000MW
-1,000MW Coal
Coal
Power
Power Plant
Plant in
in Lamu
Lamu

Baringo
Lamu

Geothermal
Geothermal Power
Power
Project
Project

Natural
Natural Gas
Gas Plant
Plant
Mombasa

3,000
3,000 MW
MW Geothermal
Geothermal
Power
Power Project
Project in
in Baringo
Baringo
valued
valued at
at USD135MN,
USD135MN,

Sources: Vision 2030; Ministry of Industrialization; Office of the Deputy President of Kenya; Trademark East Africa

700-800
700-800 MW
MW Natural
Natural Gas
Gas
Fired
Plant
near
Fired Plant near
Mombasa
Mombasa through
through aa PPP
PPP

10

Agenda

Why Kenya

Why the New Kenya

Why Agriculture in the New Kenya

How Government is Enabling Private Sector Investment in Agriculture

What are the Investment Opportunities

What are the Next Steps for Investors

11

Why Agriculture in Kenya?

A Competitive and Attractive Agriculture Sector

Kenya has demonstrated its ability to be a regional leader in agriculture supported by its strategic location
and abundant resources
Leader
Leader in
in Agricultural
Agricultural
Exports
Exports

Strategically
Strategically Positioned
Positioned
for
for Trade
Trade

Total Agriculture Merchandise

Export Value, USD MN, 2011

Abundant
Abundant Human
Human and
and Natural
Natural
Resources
Resources

Data Request

Map

*
*

Within the EAC, Kenya is the

regional leader for agricultural
product exports

In Africa, Kenya is the leading

exporter for floriculture

While Kenya is the third largest

producer of tea globally, it is the
number one exporter

Bordered by 5 countries within East

Africa and boasting comprehensive
air routes across the African region,
Kenya is strategically positioned
for regional and pan-African
trade in agricultural commodities

Kenyas population is one of its

most attractive resources, with a
large number of well-educated
professionals (4th highest literacy
rates in Africa) and strong
entrepreneurial tradition

Kenya is also internationally

accessible via its ports, such as
Mombasa and the planned Lamu
port, that support extensive exports
to a wide range of locations on and
off the African continent

Numerous professionals and

higher learning institutions with
strong research and technical
expertise in the agriculture sector

Abundant biodiversity, with seven

attractive agro-climatic zones

Source: World Bank, 2014; Trading Economics, Reuters, 2014; All Africa

12

Why Agriculture in Kenya?

An Integral Sector for Economic and Social Prosperity

Agriculture is vital to the success of the Kenyan economy because it is a priority contributor to the
governments economic and social objectives
The Importance of Agriculture

Economic
Growth

Employment
Creation

Food Security
and Nutrition

The success of Kenyas

agricultural sector is
essential to long term
economic growth and
prosperity as the sector is
the largest contributor to the
Kenyan economy,
accounting for 26% of GDP
in 2012

Employment in agriculture,
accounted for 60% of
employment in 2012, the
largest contributor to total
employment, which further
highlights its value to the
economys success

Building commercially
viable and strong capacity
in agricultural production
and agro processing will
enable Kenya to withstand
global food shocks and
achieve sustainable food
security and nutrition

In line with the tenets of Grow Africa, agriculture underpins

the success of the Kenyan economy because of its role in
creating sustainable and inclusive market based growth
and contributing to lasting poverty reduction

Source: Economic Survey 2013, Kenya National Bureau of Statistics, 2013; Medium Term Expenditure Framework, 2012

13

Why Agriculture in Kenya?

A Strong Momentum towards Agro-processing

Agro-processing is leading to accelerated growth through the increased contribution of the manufacturing
and agriculture sectors, while multiple positive effects also accrue to the livelihoods of smallholder farmers
Benefits of AgroProcessing

Impact of Agro-processing on Smallholder

Farmer Livelihoods

Effect on Economic
Development and Growth
1

Enhanced
Enhanced Value
Value
Addition
Addition

Increased
Revenue

Increased
Employment

Guaranteed
Guaranteed
Demand
Demand through
through
Contract
Farming
Contract Farming

Access
Access to
to
Technical
Assistance
Technical Assistance
Programs
Programs

Food Security
and Nutrition

Source: IFAD database, The Economist 2012, FAO

Economic
Economic stabilisation
stabilisation
and
and regeneration
regeneration through
through
increased
employment
increased employment and
and
inclusive
wealth
creation
inclusive wealth creation

Expanded
Market Access
3

4
Introduction
Introduction of
of New
New
Technologies
Technologies

GDP
GDP growth
growth
through
through increased
increased
manufacturing
manufacturing and
and
agricultural
agricultural output
output

Reduced Post
Harvest Losses

Community
Development

Integration
Integration into
into global
global
markets
by
accelerating
markets by accelerating
technical
technical innovations,
innovations,
promoting
entrepreneurship
promoting entrepreneurship
and
and improving
improving business
business
practices
practices

14

Agenda

Why Kenya

Why the New Kenya

Why Agriculture in the New Kenya

How Government is Enabling Private Sector Investment in Agriculture

What are the Investment Opportunities

What are the Next Steps for Investors

15

How Government is Enabling Private Sector Investment in Agriculture

Approaching Agriculture as a Business

The Government of Kenya has shifted its focus to enabling the private sector to become the primary
engine of growth in agricultural production across a number of areas
Therecognises
Government
Stopped
Government
thehas
following
challenges

.and is thus working on

Treating agriculture as a development project

instead of a viable business venture

11

Implementing targeted policy reforms to support

private sector development

Limited agro-processing capacity to take

advantage of increased demand for value-added
agricultural products

22

Encouraging agro-processing through the

development of special economic zones

33

Enabling food security through various initiatives,

including the Galana-Kulalu project irrigation
scheme

44

Creating new financial incentives and schemes

for the private sector

55

Strengthening investment-driven strategic

partnerships with the private sector

66

Focusing on value chains where Kenya has

comparative advantage

Untapped potential of irrigated land to

expand and optimise production of crops,
livestock and fisheries

Crowding out the private sector, which has

historically diminished the profit potential in
agriculture

Funding isolated projects in arbitrary value

chains that do not grow agriculture in a
measurable way

16

How Government is Enabling Private Sector Investment in Agriculture

11

Policy Reforms Enabling Competitive Agriculture

The Government has committed to implementing policy reforms across domains to make Kenya a
competitive agricultural economy
Increased Private Participation in
Enhanced Business Environment
Production
and Distribution
of Inputs

Starting a business: Joint reform efforts by the

national and county governments have reduced the
average time to start a business by 22 days and the
average cost by 5%
Enforcing Contracts: Kenya introduced a case
management system that will help increase the
efficiency and cost-effectiveness of commercial
dispute resolution

Provision of assistance in establishing producer and

marketing associations

Introduction of the input subsidy programs which

are in the process of being optimised to improve the
access and affordability of inputs for smallholder
farmers

Recent
Recent
Policy
Policy
Reforms
Reforms

Expanded Access to Financial Services

Improved Food Security and Nutrition

Establishment of a Risk Sharing Facility, with an initial

investment of USD 10MN over the next 3 years to
unlock USD 50MN from commercial banks

Enhancements in the nutrition and yields of local

varieties/breeds of crops, livestock and fisheries
through research and extension services

Provision of rural credit for farming and promotion of

micro-credit schemes through village community
banks and holistic natural resource management

Raised levels of strategic food reserves

Establishment of a fund to purchase livestock from

drought stricken areas

Enablement of farmers to access traditional financial

services on their mobile phones through Kenyas
leading mobile innovations

Source: IFC Doing Business: Subnational Business Reforms in Kenya; Ministry of Agriculture, Livestock and Fisheries; KARI, FAO; AGRA

17

How Government is Enabling Private Sector Investment in Agriculture

22

Special Economic Zones

Kenyas Special Economic Zones (SEZ) are aimed at promoting rapid economic growth through increased
agro-processing in selected zones, while ensuring there is an enabling business environment for investors
Investor Incentives in the Zones

Guaranteed
Infrastructure

Investors enjoy numerous tax incentives

including a ten year corporate tax holiday,
withholding tax holiday, excise duty and
Value Added Tax (VAT) exemption, and
repatriation of profits

SEZs will facilitate the secure supply of

raw materials for processing

Tax Incentives

Supply Security

Land

Other Services

The SEZs will include the establishment of

agricultural parks, industrial parks as well
as science and technology parks

Location of the 3 Special Economic Zones

Kenya will build special economic zones in

Mombasa, Kisumu and Lamu

Kisumu

Mombasa will host the largest special

economic zone under 2,000 square km of
land while Lamu and Kisumu will be 700
square kilometers each
SEZs will allow for a wider range of
commercial ventures, wealth creation
and job opportunities including the
creation of free ports and trade zones

Source: Kenya Vision 2030; Special Economic Zones Bill, 2012

Lamu
Mombasa

Special
Economic
Zone
18

How Government is Enabling Private Sector Investment in Agriculture

33

Galana-Kulalu Food Security Project

The Galana-Kulalu Scheme is a flagship project worth USD 2.88BN to be implemented over five years on
one million acres with an aim to enable Kenya to become a food secure nation
Overview of the Scheme

The Galana-Kulalu project is a government

initiative to enhance national food security by
optimising of the productivity of the Galana and
Kulalu Ranches on one million acres of land
irrigated over the next five years
This will occur through targeted investments
in the production of crops, livestock and
fisheries, the optimisation of eco-tourism
activities and the integration of sustainable
utilization of other natural resources

Core Benefits

Integrated farming for crops and animal

production
Export of surpluses to regional and international
markets
Revenue generation
National food security
Social and political stability

Government Support in
Galana-Kulalu
Water development on the
Tana and Sabaki Rivers

Production Opportunities for

the Private Sector

Maize:
525 253 acres

Establishment of
production support and
value chain structures
Livestock1:
404 868 acres

Development of transport
and communication
infrastructure
Sugarcane:
311 731 acres

Land use planning and

development

Environmental and social

impact assessments

Horticulture:
134 143 acres

Note: 1Includes Dairy, Beef, Poultry, Goat and Sheep Production

Source: Presidential Strategic Communication Unit , January 2014, NIB 2014; Land Use Plan, Consultancy Services for Pre-Investment, Pre-Feasibility and Planning
19
Study of Galana Kulalu Food Security Project, 2014

How Government is Enabling Private Sector Investment in Agriculture

44

Financial Incentives

Various incentive schemes have been implemented to promoted local business activity and stimulate
manufacturing for exported products while providing key guarantees to the investment community
Promoting Local Business Activity

Investment
Allowance

Allowances on plant, machinery,

buildings and equipment for hotel and
manufacturing sectors is 100% in
Nairobi, Mombasa, and Kisumu and
150% in non-urban locales

Guarantees to Local and Foreign Investors

Repatriation of
Capital and Profits

Guarantee Against
Expropriation

Source: Export Promotion Council, 2014; Trade Incentives, Kenya High Commission, 2014

Stimulation Local Manufacturing for Export

Tax
Remission for
Exports

Manufacture
Under Bond

Export
Processing
Zones

Remittance duty and VAT (duty

drawback) on raw materials
used in the manufacturing of
goods of export

Exemption for duty and VAT on

imported inputs

100% investment allowance of

plant, machinery, equipment
and buildings

10 year tax holiday after which a

flat 25% tax rate is implemented
for the next 10 years

20

How Government is Enabling Private Sector Investment in Agriculture

55

Private Sector Engagement

The Government of Kenya is also leveraging a number of critical forums to engage the private sector in the
transformation of its agriculture sector
Government Involvement in Key Agribusiness Forums and Platforms

Industrialization
Industrialization
Week
Week

Leverages the Kenya Agribusiness and Agroindustry Alliance as the

primary platform to actively engage with agribusiness in Kenya. One of the
key initiatives of the KAAA, is the inclusive business platform which is
supported by the government and agribusiness to enhance investment and
empower smallholder farmers

Promotes and develops commercial activities of the Kenya National

Federation of Agricultural Producers, enabling it to provide. a diverse range of
services to farmers and institutions in the agricultural sector

Hosted an Industrialization week in March 2014 to introduce various

players in the agroprocessing supply chain

Hosted the 5th Africa Grain Trade Summit in 2013, which had an aim to
explore the continents potential for the global trade in grain, attended by
over 250 top African leaders from the private sector, NGOs, development
partners, financial institutions and government representatives

Joined Grow Africa in 2011 as one of the pioneer member countries in

an effort to support the initiative to accelerate investments for sustainable
growth in African Agriculture
21

How Government is Enabling Private Sector Investment in Agriculture

66

Focus on Competitive Value Chains

Kenya has several key value chains in which it has a competitive advantage and which could serve as
essential investment platforms for the countrys continued economic success
Value Chains Integral to Building the Agricultural Sectors Competitiveness

Tea

Coffee

Floriculture

Dairy

Sugarcane

Mangoes

Rice

Marine and
Fisheries

Source: Ministry of Agriculture, Livestock and Fisheries

Passion Fruit

Cashews

Livestock
22

Agenda

Why Kenya

Why the New Kenya

Why Agriculture in the New Kenya

How Government is Enabling Private Sector Investment in Agriculture

What are the Investment Opportunities

What are the Next Steps for Investors

23

What are the Investment Opportunities

Investment Opportunities in Selected Value Chains

A rigorous filtering process was conducted based on the market potential, competitiveness, impact and
outlook of selected commodities to arrive at five value chains in which opportunities could be identified
Filters
Filters for
for Identification
Identification

Immediate
Immediate Opportunities
Opportunities

Mangoes

Sugarcane

Livestock

Rice

Market Potential

Country
Competitiveness

Social Impact
and
Investor Outlook

Dairy
Immediate Opportunities
refers to value chains with
immediate investment cases

Source: Ministry of Agriculture, Livestock and Fisheries

24

What are the Investment Opportunities

Snapshot of Sugar Production and Processing Opportunity

An opportunity exists to produce white milled sugar to be sold to Kenyan local markets through retailers
and wholesalers, as well as generating by-products such as molasses and power
Potential for New Entrant in Tana River Delta

Deficit in Local Sugar Production

Kenyas it not able to meet the growing demand

for sugar as its sugar deficit is 218,000 MT and is
expected to increase 1.9% per year to nearly
243,000 MT by 2017
*

To meet this deficit, an opportunity exists

for investors in the Tana River Delta, as it
provides favourable agro-climatic conditions
for cultivating sugarcane and could be
supported by the Galana-Kulalu project

*
*

*
*

Investment
Opportunity in
Sugar
Production and
Processing

Opportunity to invest $339 million into

producing and processing sugarcane
with a cogeneration power plant;
scheme will produce 150,000 MT
sugar / year at full capacity and
generate 30 MW of power

Kenyas local competitive landscape

provides an opportunity for a wellmanaged entrant; within 5 years of
operation, a new entrant can gain 12.7%
market share

Initial Investment
Production Capacity

$339.5M
150,000 MT of sugar

IRR

21%

NPV

$267.0M

25

What are the Investment Opportunities

Snapshot of Mango Production Opportunity

An opportunity exists for large-scale production of the Ngowe mango variety, through a series of nucleus
farms, which will ensure a consistent supply of inputs to processors, enabling them to meet rising demand
Competitive Advantage in Ngowe Mango

Growing Market for Mangoes

Demand for mangoes is growing at 10%, with

increasing demand for processed products such
as a pulp and juice which is not met by local
production

Kenya boasts among the highest mango

productivity in the world, and can exploit its
favorable agro-climatic conditions for mango
cultivation in the Tana River Delta

*
*

*
*

Initial Investment
Investment
Opportunity in
Mango
Production

Opportunity to invest $30.2M into

producing Ngowe mangoes with an
estimated selling of over 190,000
Ngowe mangoes by Year 5 of
operations

Production Capacity

$30.2M
190,000 Ngowe mangoes

IRR

20.7%

NPV

$19.5M

26

What are the Investment Opportunities

Snapshot of Beef Production and Processing Opportunity

An opportunity exists to invest in livestock production and processing, sourced from pastoralists and
ranches, resulting in the supply of ~40 000 cattle per year to local markets to meet growing beef demand
Low Commercialisation in Domestic Production

Growing Market for Beef

The beef industry has been ranked as one of

Kenyas fast rising economic sectors, while a
significant amount of illegal imports indicates strong
local demand not being fulfilled domestically

Overall, there is a low degree of commercialisation

in Kenyas beef production sector, indicating there is
much room for private sector expansion into beef
production, specifically in the Laikipia District of west
Kenya and Taita Taveta County
*

*
*
*
*

Initial Investment
Investment
Opportunity in
Livestock
Production

Opportunity to invest $20 million into

production and processing of
cattle, reaching 40,000 head by Year
5

$20M

Production Capacity

40, 000 cattle per year

Processing Capacity

90, 000 heads per year

Net Profit Margin

(Year 5)

31%

27

What are the Investment Opportunities

Snapshot of Rice Processing Opportunity

An opportunity exists for the production of white milled rice to be sold in local markets through retailers
and wholesalers, as well as generating by-products including husk-based charcoal, rice bran and poultry
feed
Deficit in Local Rice Production

Rice is increasingly becoming an important part of the

Kenyan diet as evidenced by growth in consumption,
however, local production has failed to capture the
growing market, resulting in a deficit in local production
and a heavy reliance on imports

Potential for New Entrant in Central and Western Kenya

To meet this deficit, an opportunity exists for

investors in Central and Western Kenya, as it
provides favourable agro-climatic conditions for the
wide-scale cultivation of rice

Investment
Opportunity in
Rice Processing

Opportunity to invest $15MN into a

rice processing plant, to dry, mill
and package white upland rice,
cultivated in the Perkerra and Kerio
Valley National Irrigation Board
schemes, as well as processing the
by-products of rice production

Kenyas local competitive advantage in

upland rice, producing yields of up to
7MT/Ha, provides a particularly attractive
opportunity for a well-managed entrant to
establish a processing mill and capture a
share of the growing local market for rice

Initial Investment
Processing Capacity

$15MN
22,590 MT

Net Profit Margin (Year 5)

29%

Net Income (Year 5)

$ 7.3MN

28

What are the Investment Opportunities

Snapshot of Dairy Processing Opportunity

An opportunity exists to invest in the establishment of a milk processing plant situated in Nakuru, sourcing
milk from local smallholder farmers in Nakuru and adjacent regions for sale in local markets
Increasing need for Milk Processors

Growing Market for Processed Milk

Kenyas demand for dairy products is significantly

higher than in other EAC countries and is
expected to continue to grow, driven by an
increased preference by domestic and regional
markets for processed dairy

However, despite the sizeable capacity for local

production, Kenya suffers from a milk deficit due to
limited dairy processing capacity and low quality
feed

Kenya offers an attractive market

opportunity for dairy processing, as
the demand for processed milk is on
the rise and is expected to continue
increasing at 15%

Investment
Opportunity in
Dairy
Processing

Opportunity to invest USD 32MN into

a processing plant in Nakuru; with a
daily processing capacity of one
millon litres for the production of
fresh UHT milk for sale to Kenyan
local markets

Opportunities exist to invest in a milk

processing plant, partner with an
existing processor and/or enter a joint
venture with a feed processor

Initial Investment
Processing Capacity

$32MN
1,000,000 litres daily

Net Profit Margin (Year 5)

Net Income (Year 5)

30%
$86.6MN

29

Agenda

Why Kenya

Why the New Kenya

Why Agriculture in the New Kenya

How Government is Enabling Private Sector Investment in Agriculture

What are the Investment Opportunities

What are the Next Steps for Investors

30

What are the Next Steps for Investors

Investment Process and Key Contacts

KenInvest has a dedicated team to assist investors throughout the investment process by providing
support at each of the five stages of initiating operations in Kenya
Overview of Investment Process and Key Support from KenInvest
11

Opportunity
Identification

Provides
promotional
information on
investment
opportunities and
the nuances of
operating a business
in Kenya

22

Company
Registration

Provides guidance
and support on the
most optimal
options for
company
registration

33

Investment
Certificate
Approval

Issues Investment
Certificates that
facilitate immediate
start-up of business

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Land
Identification
and
Acquisition

55

Registration
for Tax and
other Licenses
and Permits

Assists in obtaining
Supports site
tax incentives or
identification and
exemptions, and
land acquisition on
facilitates linkages to
request, and
government
facilitates linkages
agencies for the
to Commissioner of
issuance of
Lands
additional licenses
and approvals

Key Contacts
Dr. Moses Ikiara

Managing Director Kenya Investment Authority

info@investmentkenya.com

David Mugambi

Sn Investment Officer
mugambi@investmentkenya.com
+254 771286 276
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Gem Kodhek
Agriculture and
Agribusiness Sector

33

Agricultural Imperatives For Kisumu

1. Maize yields
Input use, extension advice, post harvest losses
2. Alternative food crops
Beans, Soya, groundnuts, simsim, sesame
3. New cash crops (end sugarcane, release thousands of Ha)
French beans, bananas, other tree crops,
herbs and spices
4. Animal product value chains
Milk, meat, chicken, eggs, small stock
5. New Agribusinesses to support the plan
and feed a city

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Overview of 1st Projects

Agrics Ltd: US$600,000 AECF Grant

Farm inputs: hybrid seed, fertilizer, extension, 30 day old chicks
(Nb poultry)
Markets : Nafics.
0.5 and 1 acre packages, 4-8 months to pay
Seme

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Overview Of projects

Joshiche General Traders: US$500,000 grant

Aggregation of soyabean initially 2,000
farmers in Ahero Irrigation scheme
Seed, extension, market
Sell to processors, express and make soya oil,
sell soya cake to feed

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Work In Progress

Mt Kenya Gardens/Meru Greens

French Beans in sugar belt
20 tons per day canning plant in EPZ.
10 ton lorry every 2 days Ksh 400K
Ksh 6m solar cooler plus site + loading soon
Requirements:
50 acres among 200 farmers, 2 extension officers

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Work in Progress (II)

Banana
20 ten 10 ton lorries per weekKsh 4m
(Meru 40m) from 10 markets each week!
Requirements
100 farmers on 1 acre, 200 on acres,
Invest Ksh 250K and wait 15 months.
Irrigation water, river, well, borehole
1 acre = 500 plants
500,000 Tissue culture bananas at Ksh 150 each
2 motivated and facilitated extension officers

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The way forward

Land and water mapping

Schools program
Agricultural entrepreneurs networks
Agricultural processing business park
Farmer/entrepreneur exchange visits
Interrogate the agriculture budget
1.
Public expenditure review
2.
2015/16 Budget proposal

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