Kakuzi nets Sh507M earnings as exports hit pre-Covid highs
A steady increase in earnings from macadamia and avocado exports has seen fruit exporter Kakuzi report Kes507 million pretax profit for the six months ending June 2024.
In a market update on Tuesday, the Nairobi Securities Exchange-listed company noted that demand for macadamia nuts in the global markets has grown to pre-Covid levels.
Kakuzi experienced a 35 percent increase in total turnover to Kes1.175 billion, up from Kes873 million posted in the comparable half in 2023.
Managing Director Chris Flowers said these earnings rode on a buoyant international avocado market that saw the Murang’a-based company benefit from subdued global supply for the popular superfood from Peru and Mexico.
“Global stock levels from 2023 have largely been consumed, and 2024’s production, which is currently being harvested and processed, is well-committed to the market,” Flowers said.
He added: “Despite the challenges posed by reduced avocado production in Peru and Mexico, Kakuzi has shown resilience in the face of a tight supply situation in Europe and the USA. The impact of climate change on agriculture, including our own, has been significant, with the rainfall last April nearly double the normal amount, negatively affecting avocado production.”
Overall, avocado earnings soared by 42 percent, closing the half at Kes951 million, up from Kes670 million in June 2023.
Kakuzi’s macadamia segment also returned to the profit zone, posting Kes32 million in earnings, up from a Kes329 million loss suffered in the corresponding half last year.
At the same time, disclosures show that demand for Kakuzi’s sustainable wood products grew in the six months under review, with divisional profits increasing by 54 percent to Kes71 million.
Read also: Kakuzi launches macadamia oil factory
Value-added fresh produce
Board Chairman Nicholas Ng’ang’a reiterated Kakuzi’s’s commitment to promoting responsibly grown Kenyan superfoods in both traditional and emerging markets.
“We are proud to see more and more customers appreciating our value-added and fresh produce range of edible oil, fresh meats, and roasted and coated macadamia nuts,” said Mr. Ng’ang’a.
Mr Ng’ang’a explained that the geopolitical situation in and around the Red Sea has forced all the major shipping lines to travel around the Cape rather than through the Suez Canal. As a result, the shipment period for Kenyan avocados has been extended, often times affecting the quality of the produce.
“These challenges underscore the critical need to diversify our markets. We acknowledge that while China, India, and the Middle East offer long-term growth possibilities, they currently lack the scale to substitute Europe. However, exploring these markets could provide a buffer against future market disruptions,” Mr Ng’ang’a said.
In March 2024, Kakuzi entered the Indian avocado export market. The firm, which has enjoyed traditional market access opportunities in Europe, China, and the Middle East but it is exploring new opportunities for avocado sales in India and Malaysia.
Due to the ever-growing demand for quality superfoods globally, the company expanded its avocado orchards by 60 hectares last year, up from 927 hectares at a Kes120 million investment cost.
