The Mountain Journal Crew in Murang’a
KAKUZI PLC Limited has reported a loss in the profit margin
following the impact of the slow market growth, as a result of Covid 19 pandemic.
The chairman Nicholas Ng’ang’a disclosed that in the half
year trading the profit dropped by three percent posting Sh276. 7 million as
compared to Sh285.9 million reflected in the same period last year.
To sustain trading growth and mitigate market
risks, the firm, he said, has swiftly moved to enhance its operating
efficiencies. Further attention, he said, has also been applied to a
diversification and value addition strategy for opportunities in the local
market.
The leading international markets for Kakuzi
products, though negatively impacted by the COVID pandemic, have begun to show
positive recovery signs with growing demand in the traditional key nut markets.
The firm, he disclosed, is anticipating a
significant drop in avocado production as the orchards enter into what is known
as an ‘Off’ year. “Bi-annual bearing in avocado production is common, with
an ‘on’ year yield being higher than an ‘off’ year yield. After last year’s bumper harvest, this year’s
production is in an ‘off’ cycle.”
He stated that the market position in Europe for
avocados is not as buoyant as experienced in previous years.
“High supply levels of avocados into Europe
from Peru and COVID restrictions have occasioned downward pressure on prices.
At this stage, it is too early to predict the full impact of these developments
on the Company’s full-year performance, but we continue to actively
monitor,” Ng’ang’a said.
“The mid-year is always a
challenging time to make any precise projections for the year-end performance. We have a good balance of products to market,
though, given the unique circumstances of the last 18 months that the world
finds itself in, we remain exposed to market and price volatility. To further
raise our revenues, we continue to look at other value addition and local sale
opportunities for our products,” he added.
At the field operating level, the Company he
said is currently witnessing lower output against its avocado harvests, but
macadamia nuts’ production remains within earlier projections for the year.
Positive growth, he said, continues to be
registered from our Blueberry sales in the domestic and regional markets. He
noted that this is due to the growing consumer preference for quality locally
produced berries for catering and home consumption.
“Demand for the Kakuzi range of wood, beef
and animal feed products remains encouraging, and we continue to explore
additional diversification strategies for this important range of products.
Unfortunately, tea production returns have not improved in the last 12
months. We are aware of the proposed new
tea regulations, and we await to see the outcome of the Court process,”
Ng’ang’a explained.
He noted that the production and sales of Kakuzi
sustainable wood products remain strong, and the firm is considering further
expansion of its sawn timber production capacity to meet growing demand.
“This is a crucial product range for Kakuzi
as it also demonstrates that sustainable commercial forestry can be
profitable. Looking ahead and with the
growing demand for timber products, we cannot underestimate the importance of
both environmental and commercial forestry prospects,” he said.
He pointed out that “During the peak
season, the Company now employs nearly 3,000 people and has a dedicated
management staff of 66.
Over the last 12 months, the Company has
undergone and passed five separate social and operating compliance audits which
appraise parameters ranging from agricultural practices, environmental
protection and social standards. This is an essential contributor to national
growth and is a measure; of our true value to the Kenyan economy.”
As part of the firm’s corporate governance
advances, Kakuzi Plc is now at an advanced stage of developing an
Operational-Level Grievance Mechanism (OGM) that will provide multiple avenues
through which its employees and the Community can raise grievances and issues
they would like the Company to address.
In a trendsetting move, the firm recently named
an Independent Human Rights Advisory Committee (IHRAC) chaired by former
Attorney General Prof Githu Muigai.
Members of the Prof Githu chaired IHRAC, include
former Independent Policing Oversight Authority (IPOA) Board Member Grace
Madoka, former Finlays Kenya Legal and HR Director Dr Brenda Achieng, and
Kakuzi Plc non-executive independent director Andrew Ndegwa with another member
set to be announced soon.
With the appointment of the committee to its
Board, Kakuzi PLC becomes the first corporate organization in Sub Sahara Africa
to constitute and establish such an independent advisory panel benchmarked
against the United Nations Guiding Principles on Business and Human Rights.
In appointing the IHRAC, Kakuzi joins a growing
list of globally focused institutions’ progressively adopting the UN Guiding
Principles on Business and Human Rights, such as football governing body FIFA,
Global Chemicals manufacturer BASF SE, Adidas, among others.
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