Kakuzi half-year profit drops by 3%

Kakuzi trains its sights on efficiency enhancement, value addition and product diversification to fuel growth

Agri-business firm, Kakuzi has announced a 3% drop in its half-year pretax profit after posting Sh 276.7mn earnings down from Sh 285.9mn posted within the same period last year. This is attributed to slower market growth and price volatility in its key export markets due to the Covid 19 pandemic.

The company’s chairman Nicholas Ng’ang’a hopes to ease losses from avocado production by applying diversification and value addition strategy as the orchards enter into what is known as an “off year”.

“High supply levels of avocados into Europe from Peru and COVID restrictions have occasioned downward pressure on prices,” he said. “Bi-annual bearing in avocado production is common, with an ‘on’ year yield being higher than an ‘off’ year yield. After last year’s bumper harvest, this year’s production is in an ‘off’ cycle.”

He added that the company is currently witnessing lower output against its avocado harvests, but macadamia nuts’ production remains within earlier projections for the year.

Although market position for avocados is not as buoyant as experienced in previous years, he said that macadamia nuts’ production remains within earlier projections for the year. At the same time, demand for the firm’s range of wood, beef and animal feed products remains encouraging. Tea production returns, unfortunately, have not improved in the last 12 months, he pointed out.

“We have a good balance of products to market, though, given the unique circumstances of the last 18 months that the world finds itself in, we remain exposed to market and price volatility. To further raise our revenues, we continue to look at other value addition and local sale opportunities for our products,” he said.

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