Nairobi, Kenya- Kakuzi Plc (NSE: KUKZ), a leading agri-business firm in Kenya, has reported a remarkable Sh 507 million half-year pretax profit, fueled by a strong recovery in the global markets for its macadamia nuts and avocado superfoods.
The company’s performance highlights a significant turnaround, driven by strategic market positioning and a favorable international environment.
Kakuzi’s half-year results reflect a 35pc increase in total turnover, soaring to Ksh 1.175 billion from Ksh 873 million in the same period last year.
The surge is primarily attributed to the booming international avocado market, where a reduction in supply from traditional heavyweights like Peru and Mexico created a golden opportunity for Kakuzi.
The company capitalized on this with a 42pc growth in avocado sales, raking in Ksh 951 million—a significant leap from last year’s Ksh 670 million.
Managing Director Chris Flowers shared insights on the robust performance, crediting the global demand for macadamia nuts, which has rebounded to pre-COVID levels.
Although prices have not yet returned to their 2021 peak, Kakuzi managed to turn around its macadamia segment, posting a Ksh 32 million profit, a stark contrast to the Ksh 329 million loss experienced last year.
The global macadamia industry is on the mend, and Kakuzi is positioned to ride this wave.
Despite the positive financial outcomes, Kakuzi has faced its share of challenges. Climate change has significantly impacted agriculture, including avocado production at Kakuzi’s farms.
An unusually wet April led to difficult growing conditions, though, fortunately, only limited damage was reported. The company’s water catchment systems, including its 19 earth wall dams, performed admirably, mitigating the potential negative impacts.
Chairman Nicholas Ng’ang’a emphasized the need for market diversification, pointing out the logistical challenges posed by geopolitical tensions around the Red Sea, which have extended shipping times for Kenyan avocados.
This has occasionally led to quality issues, underlining the importance of exploring new markets like India and Malaysia.
Although these emerging markets don’t yet rival Europe in scale, they offer promising growth opportunities for Kakuzi’s future exports.
In response to increasing global demand for superfoods, Kakuzi has taken proactive steps to expand its operations.
The company invested Ksh 120 million last year to increase its avocado orchards by 60 hectares, reflecting its commitment to meeting the growing market needs.
Additionally, Kakuzi has diversified its product offerings, including sustainable wood products, which saw a 54pc increase in profits, and has ventured into new food products like goat meat and mutton.
Flowers highlighted the success of the Kakuzi Farm Market, which has become a hub for local entrepreneurs and a platform for enhancing product sales.
The company’s efforts to meet evolving consumer preferences, particularly the growing demand for farm-to-fork products like cold-pressed macadamia oil, are paying off.
Looking ahead, Kakuzi remains focused on its strategic goals, including continued market diversification and capacity expansion. As the global appetite for high-quality superfoods grows, Kakuzi is poised to further solidify its position as a leading player in the industry.
