Jamii Telecoms owner Joshua Chepkwony has built a Sh1 billion Eldoret-based milling company with a capacity to process 3,000 bags of maize per day.
The Jamii Milling plant is located 15km northeast of Eldoret town and sits on an eight-acre piece of land. Its maize flour brand is set to be launched in three weeks.
“Before venturing into this business we scanned for various opportunities and settled on this one,” Mr Chepkwony told the Business Daily.
“You cannot get it wrong with food. There is growing urbanisation which has increased the demand for processed foods.”
The milling plant is expected to employ 100 permanent staff and 50 workers on contract in the first phase. It will start by producing maize flour, poultry, animal and fish feeds. The second phase of the project will include wheat flour processing.
The North Rift is considered Kenya’s grain basket.
In 2014, value of marketed maize was Sh10.1 billion, according to the Kenya National Bureau of Statistics, a five per cent decline from the previous year.
Maize production dropped by 4.2 per cent to 39 million bags in 2014. The entry of Jamii Milling into the business is expected to offer farmers an additional market for their produce, but raise competition for raw materials with existing millers such as Unga, Dola and Jembe that also have milling plants in the town.
Mr Chepkwony said the investment is a family business financed through several bank loans.
He said Jamii does not intend to grow its own maize but will buy the grain from local farmers. It is also betting on investment in the latest milling technology to reduce cost of production and increase efficiency. The milling plant has a storage capacity of 30,000 tonnes.
There are plans to put up extra storage of 40,000 tonnes for wheat by the beginning of next year. The milling machines were supplied and installed by a Switzerland-based firm, Buhler.
“We are using our experience as a technology company to accelerate food processing to the people. The first thing we did was to bring fibre optic cable to this place. This has enabled us to access data. I can get information from my Nairobi office or at home anytime I want to,” he said, adding that the mill would operate for 24 hours in three shifts.
Mr Chepkwony said the investment would create an opportunity for the neighbouring community to build decent residential houses for employees or supply farm produce such as vegetables, milk and eggs for consumption by the workers.
“I decided to put a billion plus in the jungle. I have mortgaged myself. This is not because I am a mad person but because it is the only way to transform our country,” he said. “We need to be practical about industrialisation. It is the only way we can create employment.”
Jamii is targeting the East African market with its products, but will first concentrate in Kenya where, Mr Chepkwony says, it would reach out to supermarkets, learning and health institutions in the next two weeks in what he calls a soft-launch.
The factory has been built at a time when millers have claimed they were experiencing maize supply shortages, forcing them to increase flour prices.
The government has, however, refuted the shortage claims, and offered to open the doors of the National Cereals and Produce Board to the millers to access cheaper supplies.
Kenya is a maize deficit country that also relies on cross-border trade to supplement stocks. Millers have said the high cost of raw material was due to restricted movement of maize from neighbouring countries such as Tanzania that is facing an acute shortage this year.
The ex-factory price of maize flour has risen from the range of Sh84 to Sh87 per two-kilogramme packet in February to between Sh95 and Sh100 last month, a 13 per cent increase.