Unilever signs oil supply deal with 500 Kenyan farmers

Unilever plans to engage 500 farmers in Kenya to grow canola, a plant whose seeds the company uses to produce its flagship margarine brand ‘Blue Band.’

The consumer goods maker said it has set a target to locally source at least 3,000 tonnes of canola oil by the end of 2017, nearly half of its annual demand of 7,000 tonnes.

Unilever, working with Dutch non-profit firm SNV, and consultancy firm Agventure Ltd, will jointly invest Sh23 million to recruit and train farmers in Uasin Gishu and Nakuru to grow canola, also known as rapeseed.

The Anglo –Dutch multinational is seeking to ride on canola oil’s health benefits to push sales of Blue Band — as rapeseed has low cholesterol and contains key nutrients such as omega-6 and omega-3 fatty acids.

“Sustainable farming methods have the potential to increase yields considerably, mitigate the effects of climate change and provide economic and social benefits to farmers, their families, and the surrounding communities,” said Justin Apsey, Unilever East Africa managing director.

The company unveiled the plan and signed an agreement with SNV and Agventure to scale up canola farming in Kenya.
Dutch ambassador to Kenya Frans Makken was present during the event.

Unilever in 2002 sold its flagship cooking oil brands Kimbo and Cowboy to rival Bidco as well as Veebol margarine and Tiger laundry soap, for an undisclosed amount.

This left Unilever with Blue Band in the oils category. Unilever’s Blue Band margarine has the biggest market share in the oils and fats category in Kenya, according to Euromonitor.

“There is expected to be an increased focus on healthier types of oils and fats among the Kenya population as consumers become increasingly aware of the impact of different types of oils and fats on their general health,” Euromonitor said in a research note.

Unilever purchases around two per cent of the world’s supply of sunflower and canola oils, the company said in a statement.

The firm has hitherto been sourcing canola oil from a few large scale farmers in Kenya.

SNV will work with Agventure to enlist local farmers to grow canola, and train them in approaches of conservation agriculture to make them more productive, profitable and resilient to climate change.

The Dutch ambassador said Netherlands was providing financial backing to SNV under a five-year project meant to address challenges such as food safety, post-harvest losses, and assistance to small scale farmers to grow output.