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Unilever inks Sh730m deal with farmers for oil

By Mumbi Kinyua | February 24th 2017

Unilever has signed a partnership with farmers to boost production of canola oil, an edible oil extracted from the seeds of the rapeseed plant.

The partnership will be executed through a memorandum of agreement between Agventure Ltd, a farmers’ co-operative, and SNV, a Netherlands development organisation.

The agreement involves technical assistance to local farmers and a financial investment of Sh23 million from the three partners.

Speaking during the MoU signing, Unilever East Africa Managing Director Justin Apsey said the project would target 500 farmers in the first phase, before increasing the numbers in 2018.

“In 2018, we hope to get to 7,000 metric tonnes but that will need more than the 500 farmers recruited in phase one. The project will ... contract farmers in Nakuru, Eldoret, Uasin Gishu and the Mount Kenya region,” he said.

Unilever purchases around 2 per cent of the world’s supply of canola oils, which is touted as one of the healthiest edible oils.

According to Mr Apsey, the 7,000 metric-tonne peak demand in Kenya triggered the establishment of a sustainable local sourcing model. The project is part of a market-led horticulture programme aimed at contributing to Kenya’s food security, increased farmer incomes and sustainability.

The Sh732 million (6.7 million euros) project will be financed by the Netherlands Embassy for the five years it is expected to run.

Agventure Managing Director Don White added that the investment would be necessary to help counter the country’s importation of 99 per cent of its edible oils.

“There is sufficient production capacity in Kenya. I believe the Unilever project will grow, and beyond that there is significant demand.”

According to Mr White, insufficient rainfall in Kenya is not the biggest problem facing agriculture.

“Often, the farmer thinks that his biggest problem is the shortage of rain, which I will boldly say is incorrect. The problem is that there is insufficient diversity in agriculture in Kenya.”

Netherlands Ambassador to Kenya Franns Makken said the project was important because, “Kenya could be the granary of Africa but how to get there is the problem, and we should not underestimate the challenges.”

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