Kenya to set up palm oil plant at Dongo Kundu

The government has mooted setting up a palm oil factory in the country to improve the incomes of farmers especially at the Coast and secure Kenya’s access to a critical commodity that accounts for the second biggest import bill after petroleum.

Cabinet Secretary Investments, Trade and Industry Moses Kuria made the revelations on Twitter Friday, adding the venture to the list of projects prepared for set up at the Dongo Kundu Special Economic Zone.

Mr Kuria added that palm oil cultivation would employ vertical integration, a commercial arrangement in which one company controls various levels of the supply chain.

“The government is committed to establishing a vertically integrated edible oils industry, from supporting farmers to grow palm oil at the Coast to value addition at the Dongo Kundu Special Economic Zone.

“Until such a time when we will have a fully vertically integrated edible oils industry, the government will continue taking measures to protect consumers from powerful cartels that continue to fix high retail prices and raise the cost of living,” said Mr Kuria.

According to the 2023 Budget Policy Statement (BPS), edible oils comprise a sizable chunk of the import bill to the tune of Kes90 billion last year on account of soaring prices.

Read also: Cooking oil, food prices set to spike on Indonesia palm oil export ban

The policy document identified a need to ensure the country is self-reliant on basic food items such as edible oils to cut import dependence.

“Edible oils, primarily palm oil, is Kenya’s second largest import after petroleum, on which the country is spending approximately Kes60 billion a year before the recent price surge, which pushed the import bill to over Ksh90 billion. As part of its economic turnaround plan, the government targets to increase domestic oil crop production from five percent to 25 percent, thereby reducing the importation of edible oil raw materials.

“Towards this end, the government will attract investment to support oil cottage industries; provision of CMFs and processing machinery for small industries; and expand the processing capacity of existing industries,” read the BPS.

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