State steps up plans to regain control of the giant New KPCU

Kenya Planters Cooperative Union (New KPCU). [Wilberforce Okwiri, Standard]

Cooperatives Cabinet Secretary (CS) Simon Chelugui says the government is fast-tracking the restructuring of the Kenya Planters Cooperative Union (New KPCU) to revert it into a State Corporation.

The CS said the changes will also see the refurbishment of the New KPCU plant. New KPCU was formed in November 2019 as a public limited company with a shareholding of the Ministry of Agriculture, Livestock, Fisheries and Cooperatives and the National Treasury.

KPCU was placed under receivership by KCB in 2015 due to a non-performing loan of Sh85 million. This was in addition to other debtors who delivered coffee to KPCU and were owed Sh50 million.

In a bid to save the coffee sector, the government settled the debts and appointed the liquidator to compile, collate and develop a scheme of liquidation that would ensure asset optimisation and revival of New KPCU. New KPCU started its operations in June 2020 after the liquidator took over from KCB receivers.

CS Chelugui, while addressing coffee stakeholders in Nairobi recently, noted the structure of New KPCU as one of the key outstanding issues in the reforms.

"Looking ahead, key outstanding issues include fast-tracking interventions related to New KPCU, including liquidation completion and development of an Act of Parliament to re-establish New KPCU as a State corporation," said the CS.

The interventions also include refurbishment of its milling plant, cupping lab and warehouses. The CS said the State is fully committed to completing ongoing reforms and pursuing additional initiatives and investments to revive the coffee sub-sector.

"My ministry is at the forefront of ensuring that our coffee productivity increases from two 2kgs per tree to over 15kgs. This will lead to increased production from the current 51,000 tonnes to over 200,000 tonnes in the next five years," he said.

However, this will only happen if farmers go back to their coffee farms to increase productivity and register for the government's subsidised fertiliser programme and the Coffee Cherry Advance Revolving Fund.

He said the State has approved an additional Sh4 billion for the Coffee Cherry Advance Revolving Fund to enhance access to financing for farmers. It will be managed by New KPCU.