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Macadamia Farmers in Kenya Find Value for the Nut

Winnie Cheptoo - July 8, 2022 - 0 comments

By Dominic Kirui

The nut is making economic value for farmers in central Kenya, thanks to an export market. 

Tharaka Nithi County, Kenya: It’s a fine morning in Kathithuni village, in Kenya’s Tharaka Nithi County, and Paul Nyaga is busy inspecting the construction of his permanent house on his farm.

The 56-year-old father of five is a farmer and largely farms macadamia, a nut tree

Even though Nyaga’s family used to grow macadamia, they did not benefit from it.

“We did not know that it was a valuable tree, and we would only crack the nuts and eat it when we were younger children. Now I have planted a lot more in addition,” Nyaga says.

Now, thanks to a company that’s connected him to the export market, Nyaga earns a fortune selling the nuts for export.

“All my children have gone to school with money from macadamia. Everything I own, I can say is because of macadamia; it’s a good crop. This house you see me constructing here is as a result of the nut. On the other side of the farm, I and my wife bought land and constructed a school. An academy that she now runs,” he says.

Nyaga is one of the thousands of farmers around the country who have benefitted from the decent prices of macadamia since 2012 when a friend of his introduced him to a company called PrivamNuts EPZ Ltd.

“Now, payments come on time, and we don’t have to carry the nuts to the factory, the company comes and picks it right here in the farm. We are also benefiting from training on how to farm the nuts well, and safely for the environment. That’s why you see us mulching around the trees and not using chemical fertilizers,” Nyaga adds.

Patrick Mukundi, the founder and CEO of PrivamNuts, says that when his friend asked him to start collecting macadamia on his behalf from farmers around his Embu home, he didn’t think much of it.

Mukundi would later start PrivamNuts after quitting his banking job. PrivamNuts operated in Thika as a joint venture with a Swiss company until 2014, when they mutually agreed to end the contract and enter into an exclusivity contract, allowing them to expand their customer base; but at the same time supplying the Swiss company with nuts.

“We were able to supply them with the four containers per year that they wanted but would grow to produce more because we were able to sell to other buyers as well. By 2015, we felt that the space in Thika was becoming too small because it was a rented space, and there was no room for expansion,” says Mukundi.

“The company recently raised some capital for expansion and to cushion it from financial shocks brought about by the COVID-19 pandemic that saw its operations crippled. The investment has also gone into the expansion of operations, including purchasing machinery and premises to build its factory.

The capital has seen them grow from a small company to the big firm they are now, playing in the international space, doing business with the United States, China, and countries in Europe.

This, Mr. Mukundi says, would not have been possible without the assistance of Miller and Company Advocates, the company that has been handling all its legal paperwork, as well as advising the company on various fronts concerning its investments.

The law firm offers capital investment advice to SMEs, including startups. It is owned by Mr. Cecil Guyana Miller, Advocate of the High Court of Kenya, who is also a very successful farmer and brings a wealth of experience in the legal world with over 26 years of legal practice.

“We supported PrivamNuts with proposal development, investor due diligence, linkages with investors, and legal services, leading to successful capital raise. We are looking to finalize another investment round through an American investor, who is starting due diligence in the coming weeks,” Mr. Miller says.

Miller and Company Advocates offered these services to PrivamNuts serving as business advisors under USAID’s Kenya Investment Mechanism, an initiative that is connecting business opportunities with financing. The initiative matches SMEs like PrivamNuts with business advisors who help them package their opportunities in a language that investors understand. Benefitting from this initiative, PrivamNuts received the exposure is required to work with international clients.

“Given that SMEs often struggle to attract investments, we see value in connecting them with business advisory services providers like Miller and Company, who not only help them to document their business in language investors understand but also introduce them to a pool of investors,” says Roger Bird, Chief of Party for USAID’s Kenya Investment Mechanism.

“These consulting firms also coach the entrepreneurs to pitch their businesses to investors. They also carry out investor introductions, helping SMEs access the much-needed investments for business growth and employment creation,” he says.

At Nduri village in Embu County, 50-year-old Meshack Njiru is resting under a macadamia tree in his compound. Njiru isn’t well and says that this has contributed to losses on his farm.

“I am not able to climb trees like I used to and harvest the macadamia, let alone take care of it at night. I lose half of the yields to theft,” Njiru says as he narrates how thieves blew his brick-walled house and made away with KES 5,000 one night as he had been taken ill to the hospital.

But, Njiru says, all is not lost as the nut has been able to help him take his children to school and also cover his medical bills, as well as supply all his family’s needs.

Both Nyaga and Njiru, like many other farmers in the region, are happy to have been involved with PrivamNuts, as he says they gave him value for the nut tree.

“If I am told to fell the trees today, I wouldn’t agree. They have proved very valuable now,” Njiru concludes.

This post originally appeared here on July 7, 2022.