Dividend Payout: Integrated agro-business firm Kakuzi PLC says it will strengthen its avocado smallholder base as part of a shared prosperity business plan. Besides, the firm is focusing on agricultural production expansion and diversification projects for its macadamia, blueberry, livestock and commercial forestry business lines.
Speaking during the Nairobi Securities Exchange (NSE) listed firms 93rd Annual General meeting held virtually, Kakuzi Chairman Nicholas Ng’ang’a said the firm would this year invest more than Ksh400 million in capital expenditures (CAPEX) while focusing on upscaling its smallholder operations to complement its production capacities and boost the global positioning of Kenyan avocados.
“It’s critical that the markets only receive good quality fruits from Kenya, and to achieve this, building knowledge of the market requirements amongst farmers is very important,” Mr Ng’anga said.
Strategically Kakuzi – with a 2,500-strong workforce – continues to invest in developing its core crops of avocado, macadamia, forestry and cattle and experimenting with the new blueberry venture. “Investments in technology to reduce our environmental footprint and enhance our product quality are also progressing well,” said Ng’ang’a.
He added that firm is also exploring value-addition to a number of these crops and hope that further exciting opportunities to diversify income streams will present themselves when fully appraised.
“The markets for Kakuzi’s avocados remained solid, despite the almost complete closure of the food retail sector across our main markets. We expect that there will be some recovery in 2021, but this is not guaranteed. To mitigate this, we continue to trade with our traditional buyers as well as some key new players across 14 different countries,” Ng’ang’a said.
At the AGM, the firm’s shareholders voted for Ksh18 dividends per share, representing a 28.5% growth from the Ksh14 dividends paid out the previous year, making Kakuzi PLC one of the best performing firms at the NSE in terms of return on investment.
Kakuzi posted a Ksh848 million pre-tax profit representing a 16% drop from previous year.
“The global market is responding positively to Kenyan avocados due to their high potential to provide good quality fruits but, we must work tirelessly to secure this market positioning by focusing on the quality aspects,” Ng’ang’a said. “To secure this market positioning, Kakuzi will step up its effort to strengthen the capacity of our smallholders to meet the stringent quality and phytosanitary standards required at the global markets.”
Last year, Kakuzi achieved a milestone in its pursuit of corporate governance excellence by publishing its first Environment, Social and Governance (ESG) Report. “We acknowledge that such processes are a critically important journey where one strives to reach new standards continuously. The next ESG report will be published later on this year,” he assured.
Last year, Kakuzi achieved robust results for the year, despite the uncertainty in its main sales markets caused by the COVID-19 Pandemic. The firm posted a Ksh848 million pre-tax profit representing a 16% drop from Ksh1.014 billion realized the previous year.
The firm’s avocado and macadamia export volumes were higher than 2019 but not sufficient to mitigate a significant reduction of 34% in the price of avocados due to higher global supply.