Agricultural firm Kakuzi #ticker:KUKZ will invest Sh400 million to increase the avocado output from small holder farmers and diversify into new fruits like blueberry to grow its earnings.
The company, which has been battling human rights abuse accusations, will strengthen other business lines like macadamia livestock and commercial forestry to reduce its reliance on Avocado.
Kakuzi says it wants to tap more avocado fruits from outsiders to supplement its own farms as demand for the crop rises globally due to lifestyle changes.
With high nutritional value in terms of low sugar content and high fiber content avocados are embraced by the majority of the population in the developed economies.
"The markets for Kakuzi's avocados remained solid, despite the almost complete closure of the food retail sector across our main markets,” said Kakuzi chairman Nicholas Ng'ang'a
“We expect that there will be some recovery in 2021, but this is not guaranteed. To mitigate this, we continue to trade with our traditional buyers as well as some key new players across 14 different countries."
Kakuzi’s net profit dropped 12.8 percent in the year ended December to Sh622 million compared to Sh713.4 million a year earlier.
The firm’s sales rose by a quarter to Sh3.6 billion but costs went up by even larger margins, resulting in the reduced profit.
“The income diversification strategy is now beginning to show clear results. Avocados, macadamia nuts and wood products are all strong contributors to the business performance. We hope in time that the blueberry venture will add a fourth component to this strategy,” says Kakuzi in its annual report.
Blueberries are low in calories but high in nutrients, and demand for the fruit in Europe, China and the US has jumped in recent years.
Kakuzi said recently it will soon resume exports of avocadoes to supermarkets in Europe which stopped buying its produce in October last year when the firm was accused of serious human rights abuse.
Supermarket chains Tesco, Sainsbury’s and Lidl suspended Kakuzi supplies in the wake of reports of rape and violence at Kakuzi by The Times of London.
Mr Ng’ang’a said Kakuzi has developed an "operational-level grievance mechanism" to enhance “timely and sensitive resolution of grievances” that any of its employees or stakeholders may have with the firm.