Sasini Limited, an agriculture and plantation company owned by Kenyan millionaire Naushad Merali, is investing US$4 million in the establishment of a macadamia processing facility in Kenya.
The decision is part of a strategic plan designed to diversify revenue for the company which had its beginnings in the production, processing, marketing, and trading of coffee and tea. Launched in 1952, 11 years before Kenya’s independence from British colonial rule in 1963, Sasini began with the establishment of a single coffee farm. It acquired three more farms in 1959 before going public on the Nairobi exchange in 1960, according to the company website. Now one of the largest coffee producers in Kenya and one of the oldest firms in Kenya to be listed on the stock exchange, Sasini has eight coffee estates totaling 912 hectares. Over the years, Sasini has pursued a range of M&As that have seen the company grow into a fully integrated agribusiness, further expanded its operations beyond coffee and tea to include dairy, horticulture, and forestry.
Merali owns 51 percent of the company, which has a market capitalization of $41 million through holding companies and family trusts.
The new macadamia processing facility is planned to be established on a 20-acre farm adjacent to coffee mills currently owned and operated by the company in Kiambu, outside of Nairobi. The site is situated in a proposed protected Special Economic Zone where producers will be entitled to incentives including tax allowances.
Rejecting the notion that the inclusion of macadamia plants on coffee plantations will reduce coffee output, the company plans to inter-plant its macadamia seedlings on its plantations with its coffee bushes.
“This is being planted at desirable spacing which will not compromise on coffee production,” Merali told The Star. “We anticipate to generate a further Sh300,000 (about US$3,000) per hectare from this venture within the coming six years when we shall be at optimal production of macadamia nuts.”
The company has inter-planted 6,000 seedlings throughout its coffee plantations so far and has more than 20,000 seedlings in nurseries awaiting to be planted as part of the project.
“The venture is part of the plan to diversify the coffee business and within six years, we shall have optimal production of macadamia nuts,” Merali said while speaking at the 10th farmers open day at the Sasini Coffee mills in Kiambu. “We are going to be different from other macadamia players since the company will link the farmers with local and global markets, and we have sent researchers across the globe to look for buyers who will pay the farmers well.”
An Open Window
For the 2014 and 2015 seasons, South Africa beat out Australia to be named the largest macadamia nut producer in the world after the country’s production increased 20 percent year on year to reach 48,000 tons.
For 2016 however, the significant impact of ongoing drought has cut South African production to 38,000 tons, and has opened a window for Kenya to establish itself as a more stable African supplier of the nuts and their byproducts. In addition, macadamias are giving the country’s coffee farmers the ability to diversify while accessing a more lucrative market.
“The discrepancy between the prices and the cost incurred while farming made me shun coffee farming,” Teresia Wairimu, a local farmer told The Star in December 2015. While farmer, Henry Njihia said, “Nuts are becoming like gold in the region and everyone is embracing it.”
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Lynda Kiernan