Kakuzi ltd which is listed in Nairobi exchange and deals in farming is planning an exit on pineapple farming. After growing pineapples for over two decades now, it is signaling a shift in its products. Kakuzi Ltd is increasing acreage under avocados whose demand has skyrocketed globally.
Avocados Has Better Profits
Kakuzi Ltd while announcing that decision in March 2018, they also announce a 5.2% increase in net profit to Sh561.6 million for the year ended December 2017. The profit increase according to the company is attributed to the higher international avocado and macadamia prices.
Although the company which owns more than 25,000 acres of land has been growing tea, forestry, livestock , pineapples and other fruits, it has now decided to focus its efforts on growing hass avocado whose returns per-acre are much higher than that of pineapples.
In a statement produced by Kakuzi, the decision was reached to discontinue with fresh pineapple operation in favor of planting pinkerton, hass and fuerte avocado varieties.
The major pineapple producers in Kenya include Kakuzi, Del Monte’s in Thika and Ndemo farm in Kilgoris. For the years now, Kakuzi has become synonymous with the crop.
While some of its harvest is exported to countries such as France, Germany, Italy, Belgium and the Netherlands – mostly in canned form – Kakuzi has always sold its produce in the local market. The fruit is also used to make concentrate for juice products.
Hass Avocados and Macadmia Nuts
Over the past several years, macadamia and avocado have become choice crops for agricultural firma in Kenya with Kakuzi, Sasini and other major players reaping heavily.
In 2017, according to their statement, the company closed with 1,500 acres of land under avocado from which it harvested 7,282 tonnes of fruit. At its peak, Kakuzi had over 120 acres of its own land under pineapple and another 1,100 acres under a joint venture with juice maker Del Monte.
However, in 2017, the company closed with just 60 acres of its land under pineapple and the partnership between Delmonte is set to be terminated in future years.
According to Kakuzi, the increase in profit is as a result of continued market demand for avocado and macadamia throughout the year. The company also attributed profitability within the Tea operations has continued to reflect the difficult trading conditions and significant inflationary pressure on labor and other production costs.
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