The 750,000 square-foot facility could be leased out by November 13 when his resignation from the company takes effect.
Kenya Planters Co-operative Union (KPCU) is set to lease its idle Dandora coffee mill, which sits on 54 acres of land in a transaction that is expected to raise Sh200 million annually, with the farmers’ organisation planning to use the proceeds to reduce its debt. It has about Sh1 billion in liabilities.
KPCU’s outgoing managing director Andrew Wachira Gichu told the Business Daily the 750,000 square-foot facility could be leased out by November 13 when his resignation from the company takes effect.
“We want to commercialise the asset together with the Industrialisation ministry by turning it into an export processing zone,” Mr Gichu said.
“KPCU will earn about Sh200 million annually and this will help it get out of its cash flow problems,” he said, adding that settlement of old debt to farmers and other creditors will be prioritised.
The company, for instance, owes KCB #ticker:KCB Sh230 million. Mr Gichu said KPCU is currently underutilising its facilities and will seek an alternative space in Athi River or Mombasa after leasing the Dandora mill.
The firm is expected to start the search for a new managing director. Mr Gichu was appointed to the position in March 15, 2017.
“Please be informed that Andrew Wachira Gichu having joined KPCU in March 15, 2017 tendered his resignation on August 13, 2018 in order to pursue other interests,”Mr Julius Kiago, the company’s deputy MD wrote to Industrialisation Cabinet Secretary Peter Munya on September 12, 2018.
“He is currently serving his notice period, which will end on November 13, 2018.”
KPCU continues to sell its members’ coffee produce directly to overseas buyers after it was locked out of the Nairobi Coffee Exchange (NCE) for failure to put up a $1 million (Sh100 million) bank guarantee as part of the requirements under the Nairobi Coffee Exchange Trading Rules, 2012.
The union, which has some 700,000 members, has challenged its lockout in court in a case in which the NCE is one of the respondents.
The NCE provides a platform for producers to sell their coffee to dealers who bid for the commodity. The country plans to raise the amount of coffee roasted locally from five to 10 per cent annually over the next five years even as production remains low.
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