PUBLIC PRIVATE SECTOR PARTNERSHIP PROJECTS

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PUBLIC - PRIVATE SECTOR PARTNERSHIP PROJECTS

• Presentation at Investment Conference London, UK
• BY Dr. Romano M. Kiome
• The Permanent Secretary
• MINISTRY OF AGRICULTURE
  
• KENYA

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Agriculture National Economy

• It is the lifeline to 80 of the population
• Food and
• Employment to over 70 of the labour force
• Contributes 51 of GDP
• 24 direct
• 27 indirectly
• Generates 60 of foreign exchange earnings and
  45 of government revenues
• Contributes 75 of industrial raw material

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• Correlation with the Economy A discernible
  positive correlation between agricultural sector
  growth and that of the national economy.

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Kenya Sugar IndustryUnexploited potential

• INVESTMENT OPPORTUNITIES IN THE KENYAN SUGAR
  SECTOR

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Sugar Industry

• Domestic production stands at 520,400MT while
  demand stands at 748,300MT (2007)
• Deficit of 227,900MT met through imports
• Export potential over 500,000 MT
• Power Alcohol and electricity cogeneration not
  exploited

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Strategic Proposed Interventions with Investment
opportunities (Ksh 55 Billion BP 411 million)

• Expansive land available
• Current factories archaic technology
• 50 percent of the milling capacity Government
  Investment
• Government willing to give incentives
• Tax holidays
• Land
• Existing investment
• Market protection

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Project 1. Expansion of Nyanza sugar factory

• Currently at 3,000 TCD
• Current investment of Ksh 3.4 billion (BP 25
  million)
• Has potential for over 7,000 TCD
• Over 1800 mm of rainfall, hence no need for
  irrigation
• Adequate land
• Investment needed Ksh 12 billion (BP 90 million)

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Project 2. Consolidation and Expansion of Milling
Capacity Nyando Basin

• Currently three small factories with milling
  Capacity of 5000 TCD
• Current investment Ksh 11 billion (BP 82 million)
• Has potential for over 15,000 TCD
• Has high irrigation potential
• Government land available
• Investment needed Ksh 18 billion (BP 134 million)

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Project 3. Expansion of milling capacity in
Western Kenya

• Currently one Government and one private sector
  factories with milling capacity of 3,000 TCD
• Current investment Ksh 3.6 billion (BP 27
  million)
• High potential for irrigation
• Government land available
• Market in Uganda and Sudan
• Power alcohol and cogeneration totally un
  exploited
• Investment needed Ksh 9 billion (BP 67 million)

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Kenya CoffeeWorlds Best Origin

• INVESTMENT OPPORTUNITIES IN THE KENYAN COFFEE
  SECTOR

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KENYA COFFEE Worlds Best Origin
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COFFEE PRODUCTION

• Kenya Arabica coffee, first introduced in 1893.
• Kenyan coffee production is predominantly based
  on the SL varieties (SL28, SL34) for medium to
  high altitudes. K7 lower altitudes.

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Production cont

• 160,000 Ha. under coffee
• One third under estates two thirds
  co-operatives.
• 700,000 small-scale farmers directly benefiting
  over 5 million people and 4,000 estates
• Current production volume is about 50,000 MT
  clean coffee per year with a production potential
  of over 130,000 MT (previously realize)

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A Coffee plantation
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Incentives to the industry

• Introduction of Direct Sales (Relationship
  buying)
• Promotion of competitiveness in milling
  marketing
• Credit support -Establishment of CoDF
• Sustainability initiatives and the Development of
  a Kenya Coffee Code/Standard
• Coffee Branding project -under way
• Establishment of an industry coffee
  database-underway
• Promotion of PPPs

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Opportunities

• Branding Kenyan coffee as part of value addition
• Establishment of Partnerships with Supermarket
  chains and, or roasters abroad under a
  label-roasting
• Kenyan coffee has a high intrinsic value to
  consumers

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Coffee Value Addition

• Investors to look into Kenya for among other
  things
• Establish Joint Ventures in Value Addition
  through Finished Brands
• Undertake Direct Producer- Consumer relationships
  building
• Investment needed Ksh 10 billion (BP 75 million)

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Kenya HorticultureWorlds Number one

• INVESTMENT OPPORTUNITIES IN THE KENYAN
  HORTICULTURAL SECTOR

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Horticulture

• A self evolving sub-sector due to existing
  potential.
• Output stands at 4.9 million MT (2006) with
  projected output of up to 5.5 Million MT (2010)
  and 6.5 Million MT (2015)
• Exports rose from Ksh 43.1 Billion (BP 320
  million) in 2006 to Ksh 65.2 Billion (BP 485
  million) in 2007 with cut flowers accounting for
  65
• Only 7.5 of total production volume of fruits is
  processed
• Pineapple being the highest at 92 of total
  earnings of processed fruits

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Value Addition in Fruits1. Citrus

• Citrus production stands at 118,688 MT (2006) at
  a value of
• 75 of this production by small-scale farmers
• out of total production, 400 MT was exported
• Orange most highly processed of Citrus at 7.4 of
  total processed juice

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Citrus

• Potential Investments (Coast, Eastern Rift
  Valley)
• Production of
• Juice Concentrates
• Marmalades
• Canned, bottled, or Tetra packaged juices
• Investment needed Ksh 6 billion (BP 44 million)

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2. Bananas

• A major income earner at production volume of 2
  Million MT (2006) projected 2.2 Million MT
  (2010)
• Potential in Value Addition Investments
• Ripening
• Banana flours processing
• Paper Making
• Banana wine
• Varied banana-rolled, sweetened etc
• Investment need Ksh 4 billion (BP 30 million)

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Mangoes

• National production volume stands at over 384,000
  MT (2007) projected to 450,000 MT in 2010
• Out of the current production, only 963 MT is
  exported
• Most of mango fruit concentrate is imported
• Current distribution of produced Mangoes
• Local markets 50, Exports 10 - to UAE
• Wastage 25-30 - due to perish-ability of the
  mangoes
• 10 -processed locally
• Investment need Ksh 4 billion (BP 30 million)

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Kenya BiofuelsGreat opportunity, no competition
with food supply

• INVESTMENT OPPORTUNITIES IN THE KENYAN BIOFUELS
  SECTOR

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Biofuels

• Consumption stood at 1.4 and 3.3 million litres
  of petrol and automotive diesel respectively per
  day in 2006 with average growth rate of 2.8 per
  year.
• Kenya will require 2.7 and 6.5 million litres of
  petrol and automotive diesel respectively per day
  by 2030
• Currently Kenya would require 77 million litres
  of ethanol per year for a national 10 (E10)
  blend at current consumption levels This would
  need to grow to 148 million litres by 2030
• A national B2 would require about 26 million
  litres of biodiesel at current consumption levels
  would require to grow to 50 million litres by
  2030

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Potential Biofuels Sources

• 1. Sweet Sorghum
• Production in ASAL areas
• For Ethanol production
• 2. Jatropha
• Non competition with food production
• Large scale production processing for biodiesel
  in ASAL areas
• Product diversification salt, vegetables, leaf
  juice, dye extraction, antibiotics extracts
• Note Substantial land available outside of food
  and cash crop areas
• Investment needed Ksh 24 billion (BP 180 million)

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Kenya Agricultural InputsGreat Consumer, Value
for Money

• INVESTMENT OPPORTUNITIES IN THE KENYAN FERTILIZER
  INDUSTURY

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Agricultural Inputs

• Fertilizers
• Current national consumption of over 452,000 MT
• Potential national demand of 1 Million MT in the
  long run
• Current Fertilizer trade estimated to be worth
  Kshs.18 Billion
• Sub-sector Characterized by inefficiencies in
  pricing
• Way forward 3 tier approach for cost reduction
  as
• Procurement in bulk
• Domestic Blending
• Local production for national and regional needs

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Fertilizer

• Investments Opportunities
• Establishment of Fertilizer blending plant
• Establishment of Fertilizer Manufacturing plant
• For national demand
• To leverage regional opportunities
• Investment needed Ksh 8 billion (BP 60 million)

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Market Infrastructure

• Kenyan Agricultural market Infrastructure
  characterized by
• Overstretching
• Poor facilities development
• Lack of storage facilities
• Need for modernization
• Opportunities
• Development of wholesale markets infrastructure
  for Nairobi, Kisumu, Mombasa, Nakuru and Eldoret
  through partnerships
• Upgrading of feeder facilities in the rural towns
• Development of market information systems
• Investment needed Ksh 8 billion (BP 60 million)