A Kenyan therapeutic foods manufacturer is set to receive Sh1.4 billion in funding from the International Finance Corporation (IFC), enabling the firm expand its business eight-fold.
IFC, the World Bank’s private sector lending arm, plans to disburse the loan to Insta Products, a firm located in Athi River’s Export Processing Zone and which produces food supplements for malnourished people worldwide.
The loan will see Insta Products expand its capacity from 3,000 metric tonnes per year to 25, 000 metric tonnes, enabling it supply the ready-to-use therapeutic foods (RUTF) to people in dire health conditions.
“The proposed project is a $13.8 million (Sh1.4 billion) refinancing and growth programme to help Insta expand its RUTF production capacity on the back of an increased supply to the East African region,” the IFC said in its disclosures.
Insta’s therapeutic foods are a high calorie combination of peanut paste, sugar, oil and milk powder which is fortified with 23 vitamins and minerals.
Severely malnourished people, who cannot digest solid food portions or receive supplements intravenously, feed on the supplement for six weeks before progressing to other foods.
IFC says its funding will support timely delivery of the food items to about 350,000 more acutely malnourished people around the world as well as reduce stock-outs during emergencies.
Insta Products is fully owned by Dhiren Chandaria. He is also the chief executive at Orbit Chemical, a firm that supplies industrial chemicals to several companies but also manufactures soaps, petroleum jelly, hand gels and detergents.
Mr Chandaria, a cousin to industrialist Manu Chandaria, says he expects that the expansion will be completed by June, adding that the firm has started ordering equipment from Europe, China and the US.
The capacity expansion project, he added, will see the company grow its annual revenues from the current Sh1.2 billion to at least Sh3.6 billion by the end of next year.
“The loan we are receiving from the IFC has a six-year tenor and it is being lent to us at a favourable interest rate,” Mr Chandaria told the Business Daily in an interview.
“We hope the expansion will enable us get more business in the country as opposed to the current scenario where food for the malnourished is still largely imported.”
Mr Chandaria explained that children who are fed on the food supplements begin showing signs of improvement after a week and are healthy after about two months.
The firm’s main clients are agencies such as United Nations Children’s Fund, US Agency for International Development and the African Medical and Research Foundation, among others.
Its products are distributed regionally but they are also shipped to needy individuals in countries such as Afghanistan, Syria, Pakistan and Yemen among others places.
“Increased capacity will help Insta reach more children to prevent stunted growth and vitamin deficiency, which can have long-term effects on cognitive development, learning capabilities and economic productivity in adulthood,” IFC said.
Insta Products is a 13-year-old firm. Mr Chandaria in late 2011 bought out its founding shareholders when they were considering shutting down after the company ran into financial troubles.