KENYA – Proparco, a subsidiary of the French Development Agency (AFD), is supporting Kenya Nut Company, East Africa’s largest nut processing firm, with a US$ 18.7m loan financing.
Kenya Nuts Company is one the world’s largest exporter of cashew and macadamia nuts and is known for brands like; Out of Africa, Nutfields, Morendat, and Leleshwa.
The long-term financing, according to Proparco, is providing an amount, grace period and maturity that are currently unavailable on the local banking market.
It will mainly finance the company’s 2019-2021 development plan. In addition, it will enable Kenya Nut cope with the health crisis and facilitate short-term cashflow needs to give it flexibility in this particular period.
Proparco will also help meet Kenya Nut’s request to improve corporate governance and environmental performance, which are key areas of development for this company experiencing strong growth.
This project is fully in line with Proparco’s mandate in Africa, firstly by supporting a developing agriculture sector that provides employment and is a source of diversification for Kenya’s export revenues.
Secondly, it will contribute to improving living conditions for the most vulnerable farmers and to their professionalization.
It will also strengthen Kenya’s industrial fabric and has a climate change adaptation dimension by generating water savings in an area sensitive to water stress.
I&M Burbidge Capital is the adviser on the transaction, who guided Kenya Nut on all fronts of the deal including structuring, sourcing financing from the market, evaluation of offers that were received and managing various deal complexities.
With a macadamia nut production of some 32,000 tons in 2019, Kenya is the third largest producer of macadamia nuts in the world, accounting for 14% of global production.
The nut sector (macadamia nuts, cashew nuts and coconuts) is a key sector for Kenya and the Government considers it as a priority agricultural and industrial sector.
Kenya Nut Company was set up by coffee growers in the 1970s, under a Government program to diversify Kenya’s sources of export revenues by promoting crop diversification, especially towards macadamia nuts.
Following a growth phase focused on the development of the production and export of raw nuts, in the early 2000s, Kenya Nut entered into a diversification phase with the construction of two processing plants.
This allowed it to integrate the downstream sector, while securing its supply via its own plantations and external producers, which Kenya Nut disseminates agricultural best practices to.
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