Proparco invests $18.7 million in Kenya Nut Company
With a loan of $ 18.7 million, Proparco is supporting Kenya Nut Company, a family business that has diversified and has been active for more than 40 years in the nut sector, macadamia and cashew, in Kenya.
The company sources its supplies from more than 30,000 small nut producers. The boom in nut production is generating convincing results for the Kenyan agricultural sector.
With macadamia nut production of around 32,000 tonnes in 2019, Kenya is the third largest macadamia producing country in the world, accounting for 14% of global production. Key sector for Kenya, the nut sector (macadamia, cashew and coconut), is considered as a priority agricultural and industrial sector by the government. The sector benefited from strong government support to develop production from the 1970s, based on the observation that the coffee sector, which was going through a difficult period at that time, had too much weight in Kenyan exports.
Together with the private sector, the government continues to promote the diversification of cash crops, with a strong emphasis on the macadamia and cashew sectors.
Kenya Nut Company was created in the 1970s by coffee growers, as part of the government program to diversify Kenya's sources of export income by promoting crop diversification, particularly towards macadamia nuts.
After a phase of growth focused on developing the production and export of raw nuts, Kenya Nut entered a phase of diversification in the early 2000s with the construction of two processing plants. Kenya Nut has thus integrated the sector downstream while securing its supply via its own plantations and via external producers from whom Kenya Nut provides best agricultural practices.
In 2018, Kenya Nut, leader in Kenya, processed 25% of the national harvest and put on the market 2.5% of the world production of shelled macadamia nuts.
Proparco's long-term financing - which provides an amount, a grace period and a maturity currently unavailable on the local banking market - will mainly be used to finance the company's 2019-2021 development plan. To support Kenya Nut in the face of the health crisis, Proparco's funding will also be partially dedicated to short-term cash flow needs, to offer flexibility to Kenya Nut in this particular period.
Proparco will also support Kenya Nut in responding to its request to improve corporate governance and environmental performance, key areas of development for this rapidly growing company.
This project is fully in line with Proparco's mandate in Africa, first of all by supporting a developing agricultural sector, providing jobs and a source of diversification of Kenya's export income, then by contributing to the improvement the living conditions of the most vulnerable farmers and their professionalization, but also by making it possible to strengthen the Kenyan industrial fabric and finally by presenting a dimension of adaptation to climate change by generating water savings in an area sensitive to water stress .
Proparco's intervention will support sustainable development goals (SDGs) 2 “zero hunger”, 8 “decent work and economic growth” and 9 “Industrial innovation and infrastructure”.