Nairobi-based pyrethrum company Kentegra Biotechnology will receive Sh2.1 billion (USD 15 million) in equity and loan financing from Finnish development financier Finnfund and the United States Development Finance Corporation (DFC) to expand the firm’s production of pyrethrum flowers and revive the sector.
Kentegra Biotechnology produces and sells pyrethrin extracted from dried pyrethrum flowers to global insecticide and pesticide manufacturers.
Kenya’s pyrethrum business thrived in the 1990s but activity has dwindled due to competition from cheaper synthetic pesticides.
The loan proceeds will be used to expand the firm’s capabilities to produce pale refined pyrethrum extract, for working capital, and to access new international markets.
“The investments, totalling Sh2.1 billion (US$15 million) in aggregate, will enable Kentegra to process pyrethrum flowers from 90,000 small-scale farmers in Kenya,” said Finnfund in a statement.
“Kentegra is a company that meets all investor expectations, in terms of commercial success, sustainability and impact. It has plenty of growth potential in a very interesting upward trending market. The company is also managed by a very talented and professional team, and its operations have a significant development impact,” said Johanna Raehalme, the head of Finnfund’s Nairobi office.
Research conducted last year on the sector shows a growing demand for organic pesticides and ‘greener’ produced food.
Pyrethrin is used especially in the production of pesticides used in agriculture and households.
“DFC’s support for Kentegra will expand the company’s production capacity for a key ingredient in organic pesticide and grow the number of local Kenyan farmers from which Kentegra purchases pyrethrum flowers, focusing on growing its network of women farmers,” said Mr James Polan, the Vice President of DFC’s Office of Development Credit.
“With DFC’s support, Kentegra will increase the percentage of women farmers it works with, providing these farmers with greater and more predictable income, as well as training to implement best farming practices and financial planning tools,” added Mr Polan.
Kentegra had announced plans in April to open a pyrethrum factory in Nakuru County that would help revive the ailing sector.
The new facility would create 600 direct jobs before the end of the year.
The firm is among privately owned firms that were granted a permit to extract, process, and sell pyrethrum products after the industry was liberalized seven years ago.
