Table 4-14 – Fruit harvest by month

Most of the County’s fruit output is sold into fresh produce markets or sent for processing elsewhere, with little local value added. As a result, farmers face price volatility, and with no stable offtake it can be difficult for farmers to invest in new crops or increased yields.

There is one fruit processing plant of significance in the County, the mango processing plant established at Kalamba (the Makueni Fruit Processing Plant - MFPP). This produces mango pulps in 205 kg drums and has a modest capacity of five tonnes per hour, which equates to around 8% of Makueni sub-County’s mango output. However, the Makueni Fruit Processing Plant has had a number of problems, including:

> Dependence on a single processing line, which breaks down from time to time. > Difficulty selling output as the focus has been on sourcing and production, rather than marketing and sales. The plant is currently holding large stocks of mango pulp. > Dependence on single crop resulting in a short processing season (c. 4 months).

The Makueni Fruit Processing Plant has been looking into the potential to expanding its processing range, in particular introducing citrus juice processing and possibly water bottling. There then may be scope for this VC to build on the position of the Makueni Fruit Processing Plant.

Given the farming base in Makueni and surrounding counties, there is potential to develop a fruit juice processing plant with a long processing season through targeting a range of fruit for juicing. The table below shows that, with the exception of August and September, there should be fresh produce available for processing throughout the year, as well as a continuous supply of tomatoes with staggered planting and irrigation. In addition, some fruit (in particular citrus) can be stored for up to three months or more prior to processing25 .

25 Ritenour, M.A., (no date), Orange, Indian River Research and Education Center Port Pierce, FL. Table 4-14 – Fruit harvest by month

Mango

Citrus

Papaya

Passion Fruit

Guava

Tomato*

Pomegranate Main harvest period for target fruit

J F M A M J J A S O N D

Source: Food security, 2019, based on Machakos26

*Note: Tomato harvest periods based on staggered planting and irrigation.

If a multi-fruit processing facility was to be developed at the Makueni Fruit Processing Plant, much of the existing capacity would be suitable for a range of fruit processing (e.g., delivery area, ripening stores, washing and checking line, sterilisation line, etc.). Introducing juice bottling and expanding the range of fruit processed would maximise the benefits to farmers of the facility (in terms of offtake and price stabilisation) and secure year-round employment. However, some additional capacity would be needed, including cold stores and packing lines.

The County Government accept that private sector participation in the Makueni Fruit Processing Plant is needed to secure its long-term future, especially in terms of improving processing efficiency, quality control and marketing. Currently the County is in negotiations to lease the plant to a private investor (see box below).

Wherever the VC is developed, there is a need to ensure that the problems of Makueni Fruit Processing Plant are understood and avoided. In particular, there must be a strong emphasis on sales and marketing to ensure that products meet customer expectations in terms of quality and price, addressing the current problem of unsold stock. In addition, the links with farming cooperatives need to be strengthened to ensure timely supplies of a range of quality fruit.

The County Government has identified Kibwezi as the centre for an agri-processing hub. However, given the location of mango and citrus farming in the County, Wote would be a more suitable location for this VC.

Development of the fruit processing value chain is supported by:

> Makueni CIDP: the County Government supports value addition in agri-processing, and supported the operationalisation of the Makueni Fruit Processing Plant, and is committed to its long term success; > Big Four Agenda: prioritises the manufacturing sector which covers all areas of agri-processing; > Post-harvest loss strategy: supports the Government’s target to cut post-harvest losses from 30% to 5% of total production.

26 Food security, 2019, based on Machakos

Makueni Fruit Processing Plant

The Makueni Fruit Processing Plant (MFPP) at Kalamba was developed by the County Government as a flagship project aimed at capturing local value added from a leading crop in the County, mango, and improving the prices paid to farmers.

Since commissioning in 2017 the processing plant has been loss making, and currently receives around KES 100 million per year from the County Government to continue operations, which is used largely to cover salaries. Recognising the need to make the processing plant financially sustainable, a full diagnostics and options study has been undertaken27 .

Currently the plant is currently being managed as a county corporation while trading as a private entity. This structure gives conflicting objectives, with the plant required to pay a high price for mangoes to support farm incomes while also aiming to be profitable. The plant is also constrained by Government procurement requirements. The options study identified five possible future structures for the MFPP:

Lease the facility: easy to execute and would leave the County Government with some indirect control through the leasing terms.

PPP: structuring the partnerships can be a complex and lengthy process, and it is likely that there will be few potential investors.

Strategic investor: private investors are likely to want 51% stake, leaving the County Government with little control.

Farm-owned enterprise: Kenya Tea Development Authority identified as a potential model to follow, but the Authority faces some serious challenges (primarily a lack of innovation, low payments to farmers and corruption).

27 Diagnostics review and options analysis report, PKF 2020 funded by USAID through the Kenya Investment Mechanism. Three-Way-For-Profit Social Enterprise Co-owned by the County Government, the Community and a Strategic Investor: this structure would support commercialisation of operations, (with fruit purchases at market prices), and allow the County Government and Community ownership to use their dividends from the investment for social good.

This last option is the approach recommended by the study: the creation of a three-way social enterprise. A phased approach would be taken to achieving this with the first steps covering improvements in the operations of the plant and streamline ownership in order to achieve profitability. Once profitable, (expected to be achieved in six months), the plant would be valued and the leasing cost assessed prior to offering a share to a private investor.

While this approach seems optimistic, there is a willingness to take action and an acceptance that private involvement is essential for the future operation of the plant.

In March 2022 a Kenyan investor entered into negotiations to take over the plant under a 20-year lease. Their overall plans are in line with those of the County, as they seek first to improve operations and stabilise cash flow from mango pulp processing, and then expand in terms of volumes and product range (tomato, papaya, passion fruit, etc.).

Of these other fruit, tomatoes have the highest potential; harvesting takes place throughout the year, County production is around 25,000 tonnes per year and can be increased quickly if required. However, the market for tomato juice is relatively small compared to that for canned fruit and pastes. Producing canned tomatoes and pastes would require additional equipment (e.g. steam peeling, canning line) but this investment should be viable if volumes are sufficient as fresh tomato prices in Makueni are competitive.