Karakuta Fresh Produce has commissioned a 7,500 tonnes packhouse for grading and packing avocados grown on its 180 acres of farm and aggregated collection from 1,500 farmers.
The packhouse was unveiled in Nairobi by Equity Group Managing Director and CEO Dr James Mwangi and the Karakuta CEO Grace Ngungi in a celebratory occasion graced by Spanish Embassy’s Economic and Commercial Office Market Analyst Enrique Alvarez and officials from government agencies and avocado value chain associations.
“I am truly honoured to be invited to the commissioning of the Karakuta packhouse that is a reality now not only because of visionary leadership but also the bold step taken by the company to transform Kenya’s Agricultural value chain. This is evidence that Grace is a serious investor. This is a demonstration for us in Kenya and Africa in general that dreams can be made to come true,” said Dr Mwangi, thanking Karakuta CEO and her family for realizing aspirations through partnerships with Equity for financing, Israel for the packing plant and Spain for the market that absorbs the bulk of Karakuta produce. The packing machine financed by Equity is one of the 52 in Kenya, 48 of which are Eshel Eilon imported from Israel.
A Director at the Horticultural Crops Directorate Dr Christine Chesaro asked the subsector to seek emerging markets that are looking for volumes but also want consistency of quantity and quality.
“Some of the challenges we have are meeting quality consistently and having a machine like Karakuta ensure quality is not compromised,” she said.
Avocado Exporters Association of Kenya Chief Executive Officer Joseph Wagurah reiterated the similar sentiments saying 70% of the fruit is grown by smallholder farmers making it difficult to maintain quality required by markets.
“These farmers should be in groups which are easier to manage on agreeing on when to plant, when to spray and how much to ensure our produce doesn’t exceed specified maximum residue levels, MRLs.”
The Karakuta CEO narrated how she took a step of faith to play in a male-dominated space, expecting to see quantum impact in spite of the challenges in the sub-sector. “I wanted to be in a space where I can start as a small holder fruits farmer and scale up to be in the avocado subsector. Back then Kenya was struggling with being the largest producer of avocados but not exporting much. That prompted me to establish a model farm as a starting point to address issues of consistency, quality and working seamlessly with small holder farmers,” she said.
Today Karakuta has established an ecosystem of thousands of avocado farmers in Kiambu, Nyeri, Kirinyaga and Meru who work with aggregators to deliver their produce marketed for onward transmission to export markets.
“The aggregators have built an infrastructure through social capital for trust to ensure farmers don’t lack inputs for their produce to meet market quality and quantity,” she said adding that the facility financed by Equity is not a mere facility but a platform for transformation of the thousands of people who depend on the packhouse for their livelihood.
“Equity trusted and believed in us. When farmers come and see the facility, in operations they realise it not only belongs to Karakuta but to them too. We are grateful for this that enables us to give higher quality or better prices. in the markets abroad buyers are competing for us. We are glad that we represent the industrialization that Kenya needs and what Africa requires,” said the Karakuta CEO.
Dr Mwangi noted that like Equity the company has grown by leaps and bounds having produced 8 containers of avocados in its first year of harvest and jumping to 18 containers the following year. It projects to more than triple the throughput to 60 containers in 2025.
“The growth of Karakuta echoes Equity that is a creation of people to better their lives. Its purpose is transforming lives, giving dignity and expanding opportunities for wealth creation. I came here so that Grace can be appreciated as an example to other women to see that women are bankable.”
Dr Mwangi further highlighted the need for the agricultural sector to focus on value-addition beyond addition to production within the value chain saying that is the reason Equity’s Africa Recovery and Resilience Plan, ARRP envisions to increase lending to increase food and agriculture loan mix to 30% coupling that with manufacturing and logistics loan mix to 15%.
“In 2018 we had 3% of the loan book dedicated to agriculture. Now it is 16% illustrating that Equity has embarked on a journey not just to boost production but value addition because value addition often has more value than the product itself. With machinery such as this (in Karakuta) we can improve agriculture and transform lives and livelihoods. We have walked on this journey with Karakuta and this demonstrates to Kenyans that we can walk with them too,” he said.
Equity MD hailed Karakuta for solving a problem of quality and reliability which is what export markets desire. “We take pride in the entrepreneurship that shows you can dream big and scale quick. We create value by solving problems. The Karakuta story shows if ambition is paired with support anything and everything is possible. Grace shows how dreams look when pursued with strategic collaboration and strategy,” said Dr Mwangi.