Kenya
Sector
Agriculture & Agri-processing
As part of a national drive to attract investment in agriculture and agri-processing, foreign and local investors have the opportunity to invest in Kenya's sugar industry.
Sugarcane is grown on the fairly flat regions in Western, Nyanza and Coast provinces. About 85% of the total cane supply is from small scale growers whilst the remaining is from nucleus estates of the sugar factories.
Kenya has seven major factories with an annual production capacity of between 550,000 and 600,000 tonnes of sugar. By-products from the factories include molasses (mostly for alcohol production), baggase (for power generation) and filter press mart (for fertiliser).
Statistics show that Kenya's demand for sugar is higher than supply, leaving a gap for more investment in the sector. There exists potential for Kenya to become self-sufficient in sugar production and also produce surplus amounts for export.
Reasons to Invest in Kenya's Sugar Industry
Local market availability: Currently the production in the country does not meet the local demand for sugar, thus creating a shortfall which can be filled through utilisation of idle capacity and additional sugar factories. Kenya's population grows at an average rate of about 3% while sugar consumption is assumed to grow at an annual rate of 2%.
Good climate: The western and coastal areas of Kenya offer ideal climatic and weather conditions for the growing and cultivation of sugarcane. With above average rainfall and good temperature supported by deep fertile soil that retains water, these regions produce the bulk of sugarcane in Kenya.
Availability of affordable labour: Sugar cane production requires a supply of relatively affordable labour mainly at harvest time. Kenya offers potential investors with an abundant supply of affordable labour in the sugarcane growing areas.
Access to the regional market: Kenya's membership in regional trading bodies such as COMESA, African Union and the East African Community provides potential investors with a large potential market for their products. As a member of the COMESA Free Trade Area (FTA), Kenya is allowed duty free exports of sugar to other COMESA FTA countries. Kenya also has an export quota for sugar to the European Union. This offers potential investors with a ready and accessible market for white sugar.
Investor friendly arrangements: The Kenya government can guarantee
investor friendly arrangements such as:
Investment Opportunities
The following are some of the investment opportunities available in the sugar sub-sector:
- Bagasse for: Electricity generation, production of briquettes, paper industry, fuel to supplement steam to provide energy for the factories
- Molasses for: Alcohol production, vinegar production, supplement for livestock feed
- Filter cake can be used as an organic fertiliser and as soil conditioner
