Malaysian firm targets 5,000 stevia farmers in two years

A Malaysian company has set a target of contracting 5,000 farmers in the next two years to grow stevia crop, a natural sweetener that is used as an additive by global food processing firms such as Coca cola, Pepsi and Nestle.

PureCircle, which has been in operation in Kenya since 2009, has signed 1,400 farmers in Molo, Olenguruone, Kuresoi, Londiani, Bomet, Bureti, and Sotik. 

It is looking to expand its operations to cover Narok, Laikipia, Meru, Bungoma, Nandi, and Uasin Gishu, which have been found to be suitable growing areas for the Stevia crop.

In an interview, the PureCircle managing director Priyanko Chartterjee said the firm has plans to expand from approximately 400 hectares “to reach 2,500 hectares by 2014”.

PureCircle has obtained licences from the National Environment Management Authority (Nema) and Kenya Plant Health Inspectorate (Kephis) to expand into the new areas.

“The company is therefore looking for commercial farmers, companies, agents and investors to partner with in its expansion programme,” said PureCircle in a statement.

Mr Chartterjee said that farmers contracted by the Malaysian firm currently earns up to Sh180,000 per hectare per year. Each hectare is estimated to produce about three to four metric tonnes per year, though some farmers can harvest up to six tonnes of the crop.

PureCircle expects to raise revenue generated from its Kenyan operations to Sh400 million in the next two years from the current Sh127 million.
Mr Chatterjee said that dried stevia leaves are baled and shipped to China, where the company has an extraction facility.

Declining performance

The ultimate product is used by food and beverage industries, Mr Chatterjee said.   

The European Union’s Standing Committee on Food Chain and Animal Health 12 months ago approved the use of stevia as a food additive, opening up the 500-million people market to exports from countries such as Kenya.

The increased production is expected to provide sufficient supply for setting up of an extraction facility in the Eastern Africa region.

“The export orders that we are getting at the moment exceed the minimum 20,000 tonnes and this presents a good ground for setting up a processing factory locally,” said Mr Chartterjee.

The high demand is driven by the switch to a healthy lifestyle, where consumers are looking for substitutes for products like sugar.

Stevia is considered a healthy, calorie-free flavouring by some, though scientists’ opinions on the side effects of the crop are varied and inconclusive.
The London-listed firm has recorded declining performance since 2010.

Its revenues fell 14 per cent in the fiscal year ending June 2012 to Sh3.8 billion ($45.4 million) and sank deeper into losses from Sh1.5 billion ($127 million) to Sh1.9 billion ($161 million) in the same period.