Toyota pact with Kenya paves the way for Sh103bn fertiliser plant
The manufacturing plant is expected to end the perennial problems of fertiliser shortage in the country. PHOTO | FILE
What you need to know:
Toyota Tsusho Corporation is expected to start construction of the plant before end of this year, with the ministry targeting the first production of Nitrogen Potassium Calcium (NPK) fertiliser next year.
Japanese conglomerate Toyota Tsusho Corporation has signed an agreement with the Kenya government that paves the way for construction of a Sh103 billion fertiliser plant in Eldoret.
The memorandum of understanding (MoU) spells out the obligations and responsibilities of the Japanese company, and those of the Ministry of Agriculture which will be required to accord Toyota the necessary support through government departments for the smooth building of the factory.
The government, according to Agriculture secretary Felix Koskei, would smoothen the process of acquiring land where the plant is to be located as well as providing other infrastructure.
The firm is expected to start construction of the plant before end of this year, with the ministry targeting the first production of Nitrogen Potassium Calcium (NPK) fertiliser next year.
Eldoret has been chosen as the location of the $1.2 billion (Sh103 billion) plant due to the high quantities of the fertiliser that the North Rift region consumes, according to the government.
The manufacturing plant is expected to end the perennial problems of fertiliser shortage in the country, which has in the past exposed farmers to exorbitant prices by the traders.
The fertiliser plant, says Mr Koskei, could see the current prices drop by 40 per cent. “Forty per cent of the cost of fertiliser emanates from the freight and handling charges at the port. But having a local plant in the country will see all these costs reduced, hence cutting down the price significantly,” he said.
Toyota East Africa director and adviser Dennis Awori said the MoU would ensure the firm adheres to the schedule of the project.
“In this MoU we are committing ourselves in delivering the project within the agreed timelines,” he said.
The company, which will finance the whole project as a private venture, is expected put up the project in two phases, starting with the NPK plant.
The second phase will include production of Diammonium Phosphate (DAP), urea and Calcium Ammonium Nitrogen (CAN) fertilisers.
The government spends Sh3 billion annually to provide farmers with the low-cost fertiliser that sells at Sh2,000 as opposed to the traders who sell the commodity at Sh4,000.
PAYE Tax Calculator
Note: The results are not exact but very close to the actual.
