KAAA Investment Profiling

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% per annum. However, despite the sizeable capacity for local production, Kenya suffers from a milk deficit due to limited dairy processing capacity and low quality feed. Opportunities exist to invest in a milk processing plant, partner with an existing processor and/or to enter a joint venture with a feed processor.

Kenya’s beef consumption is growing significantly at 24%, fuelled by a growing population as well as increasing incomes and urbanisation. Up to 30% of Kenyan beef comes from illegally imported cattle, indicating a large deficit in local production to meet demand. There is a low degree of commercialisation of the sector, highlighting the need for more large-scale cattle producers to expand to meet the local demand for beef. Furthermore, significant opportunities for value addition exist in leather production.

Mangoes are increasingly becoming an important fruit in the Kenyan diet, with domestic, regional and global demand for processed mango on the rise. Despite Kenya’s competitive advantage in production and the presence of large scale processors, there is insufficient local processing of mango products, due to limited cultivation of processing friendly varieties. There is an opportunity for a commercial nucleus-outgrower scheme to guarantee production to retailers, processors, and exporters.

Rice is increasingly becoming an important part of the Kenyan diet, as evidenced by consumption growth of 38%, due to increased urbanisation, middle class growth and an expanded retail market. Kenya’s domestic rice sector has failed to capture an increased share of growing demand, resulting in a heavy reliance on imports. Opportunities exist to expand local production and processing of the cost effective NERICA upland variety of rice due to significantly higher and competitive yields.

Kenya offers an attractive market for sugar given its 218,000 MT sugar deficit and an annual sugar consumption growth of 3%. The East Africa region has an annual sugar consumption of 1.5 million MT and regional demand for sugar is also projected to increase. The Tana River Delta provides suitable agro-climatic conditions for cultivating sugarcane, with cane maturity of ~8 months and yields of up to 160 MT per hectare.