By Justus Wanzala
NAIROBI (IDN) – Incessant humming noise emanating from air conditioners welcomes one into an in expansive warehouse at Twiga Foods pack house in Syokimau area of Kenya’s capital. It is mid-morning and workers are busy sorting, cleaning and packing fresh produce ready for the market.
Established in 2014, Twiga sources produce from Kenyan farmers for sale to vendors in urban areas. It handles 14 products among them onions, bananas, capsicums, carrots, tomatoes, pineapples, pawpaws, passion fruits and mangoes. It buys produce from 8,370 farmers and sells to an estimated 5,226 vendors.
George Yara, the Warehouse Manager at the firm says the produce is cleaned then graded depending on size before being ripened or packaged and dispatched to vendors.
The firm handles only 120 tonnes of produce despite a capacity to handle 150 tonnes of which 70 tonnes are bananas.
With a turnover of 40 million Kenya Shillings (USD 400,000) Twiga, which has been able to access funds externally, is doing better than most agro enterprises in Kenya. Many are struggling hard due to barriers to affordable finance.
The viability and prospects of agro food companies particularly Small and Medium Enterprises (SMEs) took centre stage during the Nutrition Africa Investor Forum, held in Nairobi on October 16 -17, 2018.
During the Forum, USD 82 million worth of investment opportunities were explored by over 60 SMEs from across Africa.
Over 200 delegates among them business leaders, policy makers and players in the development attended the forum. They were drawn from the World Bank, European Commission and International Finance Corporation among others.
They could convince themselves that smallholder farmers are the main source of produce handled by Twiga, which is in the process of entering into agreements with farmers to ensure steady supply of produce. “This will eliminate middlemen taking advantage of farmers,” says Yara.
Most of the vendors who buy fresh produce from the firm are women. Plans are underway to enter into contractual agreements with farmers to reduce their exploitation by middlemen. They have deployed experts to work with farmers on crop management, harvesting and post-harvest handling, he adds.
According to Yara, most vendors they deal with run small groceries or kiosks.
Their focus is addressing challenges the informal market faces – like 50 percent wastage of farm produce due to perishability. “We bring wastage to five percent through delivering produce to vendors timely,” says Yara.
Twiga engages with regulatory agencies to ensure products are safe and of good quality. The company has over 300 permanent staff and approximately similar number work in the field on casual basis.
The firm has however met some challenges. Yara revealed that some farmers sale their crops before maturity and when advised to the contrary opt for middlemen who are less concerned with quality issues.
Consumers are also linking nutrition to health issues and are keen to know the types of chemicals used in growing the crops. “We are setting up a food laboratory to randomly check residues in the produce sourced from farmers in different parts the county,” he says.
Prices of the produce bought from farmers are determined by prevailing market rates. “However we tend to set prices slightly below the market rates when selling to vendors,” says Yara.
Rachel Kabuyah, Grants and Partnerships Manager at the firm says they have 76 depots in Nairobi and neighbouring Machakos county and supply produce to vendors two or three times a week.
On average, vendors purchase produce of around USD 300 weekly. “Unlike the traditional value chain, we are able to get to the last mile. This makes a huge difference to the farmers,” she says, adding that apart from reducing post-harvest losses they have minimised trade inefficiency.
Smallholder farmers make an average of USD 200 per harvest but large-scale ones earn up to USD 2000.
Kelvin Mumo, a salesman, says the firm has a mobile application for entering details of sales transactions. “Information about delivery and payment which is done via a mobile platform is instantly available and can be monitored from anywhere.”
Agness Mukene, a vendor in Syokimau says before she started receiving fresh produce from Twiga Foods she could only manage to buy 50 kilogrammes of fresh produce from markets. She sells 70 kilograms daily of assorted fresh produce. “I used to spend more time going to the market to restock my kioks but nowadays I save on transport and time,” she says.
The Nutrition Africa Investor Forum, whose aim was to generate greater investments to improve nutrition in Africa; was co-hosted by the Global Alliance for Improved Nutrition (GAIN), a Swiss Foundation, and DSM, a global company that deals with nutrition, health and sustainable living issues.
Greg Garrett, Director, Food Policy and Financing at GAIN, a Swiss Foundation that addresses issues of malnutrition, said his organisation is building opportunities for investment in nutrition. “We’re keen to roll out and support ideas that can boost investment in nutrition, with a shift from quantity to quality.”
Domimic Schofield, Senior Technical Advisor of Policy and Programs at GAIN said one in three people are malnourished globally, a situation that is contributing to increase in non-communicable diseases. He emphasized the role of private in ensuring better. “There is need to streamline markets for enhanced participation of the private sector.”
He lamented that SMEs lack collateral and hence are ignored by financial institutions with women entrepreneurs affected most. According to Schofield, Africa is rapidly urbanising creating demand for processed food, an aspect that is an opportunity for companies but also a challenge of ensuring the foods they process are healthy.
He added that climate change is also affecting food quality and that nutrient levels in crops are declining. He called for innovations that can reduce crop losses. “Use of solar to preserve food for example in Nigeria can reduce tomato losses,” Garrett told IDN.
Garrett called for a shift in policies to support SMEs build capacities to enhance production. He added that high labour and raw materials costs adversely affect SMEs in the food sector. Moreover, he noted, the firms face challenges acquiring licenses.
Opening the Forum, former Tanzanian president, Jakaya Kiwkete, said Africa shoulders the biggest burden of undernutrition related problems such as low birth weight, stunting and wasting among under five years old children and anaemia among both women and children.
Kikwete, a member of the Scaling Up Nutrition (SUN) Movement working to end malnutrition across the world, stated that some progress has however been made. “The proportion of people who suffer from hunger in Africa dropped from 28 percent to 20 percent between 1990 and 2015,” he explained.
Highlighting the importance of unlocking investments across the nutrition value chain, Fokko Wientjes, Vice President Nutrition in Emerging Markets noted that with 30-40 percent of children in Africa stunted, there is an urgent need to make nutritious foods widely available and affordable. [IDN-InDepthNews – 20 October 2018]
Photo: Delegates at the Nutrition Africa Investor Forum in Nairobi. Credit: Ishara Callan.
IDN is flagship agency of the International Press Syndicate.
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