High global demand for relief food revives Kenyan manufacturer

Outside the Export Processing Zone in Athi River, a truck is being loaded with ready-to-use therapeutic foods for export to South Sudan. About 1,250 boxes of the relief food are loaded before the consignment is sealed and the journey to Juba, where civil strife has left thousands starving, starts.

In the next two weeks, eight more trucks destined for war-torn Somalia will be loaded with the ready-to-use therapeutic foods (RUTF) which is a mix of peanut paste, sugar, oil and milk powder fortified with 23 vitamins and minerals.

It is a busy month for Insta Products, a Kenyan company that manufacturers the relief food which is rich in proteins, vitamins and minerals.

However, this was not the case a few years ago.

In 2009, Insta Products ran into financial trouble and two years later it was considering shutting down.

The company’s chief executive Dhiren Chandaria told the Business Daily that although the company had good products and a laboratory used to test the relief food to ensure it met international standards, there was a problem with the management structure.

“The owner David Hopcraft had been asking me for three years to help him, but I turned him down. I was not interested in that line of business. But when he told me he was going under, I changed my mind,” Mr Chandaria said.

The CEO says it is donor agencies like United Nations Children’s Fund (Unicef), US Agency for International Development (USaid), Family Health International that have given Insta Products a reason to fight to stay afloat.

He says customers like Unicef, USaid and FHI insisted that the factory doors had to remain open to feed the millions starving in African nations.

“As a company, we had the social responsibility to take on the challenge and fix what was wrong. And we used the family trust to get credit and start making things right,” he said.

The company was facing tough times as angry creditors, suppliers and 108 employees who had not received their pay for three months protested.

The company’s managing director, Rolf Campbell said they also lacked money to purchase raw materials and continue with production or repair broken machines.

“Dhiren and his nephew Sanchen came in with gumboots and started dealing with our liabilities. They went step by step and within six months we were transformed and starting the recovery process,” he said.

Mr Chandaria says: “Everyone who could have left at that time stayed on and that showed they really had faith in the business and being a person who loves challenges, I took it upon myself to build back the trust of our creditors, suppliers and customers with the new credit of $2 million.”

The rising global demand for food aid has boosted production and the company has a capacity to churn out 80 tonnes of porridge meal per day. Insta Products also gets orders for food aid to Afghanistan which they ship through the port of Mombasa.

However, as donor agencies turn to Insta Products, countries like Kenya are importing relief food to feed thousands starving in counties like Turkana.

“The sad thing is that with the hunger situation in Turkana we are importing products yet they can be made here locally. The company not only has the capacity to meet the needs for the malnourished in Kenya, but also those of the whole region,” Mr Chandaria said.

The company recently acquired a new machine that will boost production by an additional 30,000 tonnes, making it easy to make more relief food.

Its relief food called Instapaste is specially designed for children with difficulty in swallowing and does not require cooking.

Children with severe malnutrition that are fed on these food start showing signs of improvement after a week and are healthy after a period of eight weeks.

Last year, the company through aid agencies like Unicef fed about 53,000 malnutritioned children across the region and this year it is targeting to double the number.

Although based in Kenya, a county that produces the raw materials like groundnuts that Insta Products needs, the company imports some grains from South Africa.

“We operate like a pharmaceutical company and for now it is difficult to get peanuts in Kenya that do not have aflatoxin. We import from South Africa, Argentina and other countries that have a record of perfect quality,” Mr Campbell said during a tour of the facility.

The company has a lab that inspects raw materials before use and has an Elisa Reader machine which measures the levels of aflatoxin and gives results after one hour.

For its porridge meal, it sources 95 per cent of its maize from Kenyans. Samples are tested to check for aflatoxin before purchase.

The same inspection routine is also applied to the imported peanut paste. Only paste that meets the globally acceptable standard of edible aflatoxin is moved from quarantine section and used as a raw material.

“We are very keen with the level of aflatoxin because our products are going to help people who are already sick and we do not want them getting another illness,” Mr Chandaria said.

Once the quality of the maize and soya beans for the porridge meal is certified, the seeds are cleaned and put in batches, mixed and weighed.

The grains are ground before the flour is taken through the extrusion process to kill any inhibiting enzymes as well make it more digestible. The flour is then cooled at room temperature after which it is ground to finer powder and fortified with vitamins and minerals.

The flour is then packaged depending on the client’s needs. Before the products are released for export, a final microbiology and chemical analysis is done to ensure quality.

One of the main consumers of the porridge meal is USaid which buys the Foundation Plus product targeting persons living with HIV who are underweight in Kenya.

The food is distributed to 350 clinics countrywide but has to wait for approval from the government as it originates from an EPZ.

According to the Export Processing Zones Authority, EPZ companies can only sell their products into Kenya upon payment by the customer of value added tax and import duty and the deal approved by the minister responsible for industry.

“Most of the produce here is waiting for approval for exemption since it is coming from the EPZ so that it can get to the clinics and this sometimes can take months,” Mr Campbell said. EPZ companies export mainly outside East Africa.

“Many companies cannot export directly and a few have already been forced to close down. For us we are lucky because we are exporting to development partners who bring the country foreign exchange and they are bringing it back as donations,” he said.

But Mr Chandaria says despite all the company is on a growth path.

“It was not a turnaround but a complete restructuring of the company...we have now reached a point of making considerable sales though this is normally cyclic. Last year, we made $7 million from revenue sales alone, quite a growth from zero dollar sales,” Mr Chandaria said.

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