World Bank unit IFC to lend Tropical Heat Sh450m for factory

The International Finance Corporation (IFC) is set to lend up to $4.5 million (Sh450 million) to spices and snacks maker Tropical Heat Limited to finance the construction of a new factory on an eight-acre piece of land in Limuru.

The upcoming plant is part of the company’s expansion plan that includes introduction of new products.

The factory, whose construction is ongoing, is expected to be complete by the end of next year.

“The current 5,200 square metre facility is fully utilised and the congestion is now a major bottleneck hindering the company’s growth,” IFC said in a statement. “Hence the need for a new factory where they will relocate all their equipment currently used at the existing site.”

Tropical Heat will also procure new machinery and production lines as well as a cold storage facility built primarily to handle locally sourced potatoes, a major raw material for crisps.

“This storage facility will bring benefits to smallholder farmers and reduce risks along the company’s supply chain (that is, by improving storage capacity and duration), the IFC said in a statement.

IFC said the project would directly impact lives of smallholder potato farmers as well as help the company reduce risks of raw materials’ scarcity.

The move will also see Tropical Heat come up with a linkage programme targeted at potato farmers in key sourcing regions.

The company manufactures a wide range range of spices including herbs, seasonings, masalas and salts. Its range of snacks includes potato crisps, ethnic snacks, Kenyan chevda, peanuts, rice cakes and extruded snacks.

The company started operations in Thika town in 1974 as a cottage business run by a single family inside their house.

Mr Navin Shah’s family took over reigns of the business in 1984 and set up a factory in Thika but later opted to relocate to Nairobi’s Industrial area.

About 35 per cent of its products are on sale in nearly all major supermarkets in East Africa while a similar percentage is taken up by exports to the United Kingdom, the United States and Australia.

The remaining 30 per cent is accounted for by small supermarkets, especially those at petrol stations as well as both local and international hotels and restaurants.

While it initially targeted the mainly Asian community with their spices, they later diversified to other products, among them, popcorn, rice cakes, extruded snacks, peanuts, fried peas as well as potato crisps, chevda and masala stick.

It is among the rising companies that have featured prominently in the annual Business Daily/KPMG sponsored Top 100 Companies survey.