How Malindi Cracked The Hot Pepper Export Market

Business

How the Malindi company cracked the hot pepper export market


Workers assess African Bird Eye chili at the Equator Kenya factory in Malindi. PHOTO | CAROLINE WAMBUI | NMG

Summary

  • The town of Malindi is a popular destination for tourists looking to have fun on its white sandy beaches while soaking up the scorching sun.
  • Ecuador Kenya sells its products to large spice traders and food processors.
  • If the company had the option of restarting the business, the only thing it would do differently would be to seek investors early enough.

The town of Malindi is a popular destination for tourists looking to have fun on its white sandy beaches while soaking up the scorching sun. It is a big draw especially for Europeans and in particular Italians, so much so that it has acquired the nickname of “Little Italy”.

However, far from recreational beaches and hotels, Equator Kenya Limited has established an agro-industry which is among the most successful companies in the region. The company uses the hot weather to grow and process quality African chili peppers for export.

Founded in 2010 by Jan Willem van Casteren, the company has hired more than 8,000 farmers in the region to cultivate the variety much sought after by spice companies for its spiciness and tang.

Before settling on African bird peppers, Mr. Van Casteren says he did his homework. With only his family to fund the business, he says he hasn’t had the luxury of marketing wrong. The main consideration was a variety that is not only high yielding, but also high yielding and most importantly not capital intensive.

And African Bird Eye Chilies seemed to tick all of those boxes. This was a particularly attractive proposition for farmers who have large tracts of land but lack the massive capital outlays it takes to put them into large-scale production of other high-yielding crops that require a lot. of water.

“It’s also a very simple crop, not easily affected by pests and diseases. If it is well cared for, when it blooms it bears green, orange and red fruits all year round, ”adds Almut van Casteren, managing director of the company, explaining why many farmers have turned to Culture.

It also helped Ecuador Kenya to set attractive producer prices. For every kilogram of fresh peppers delivered by farmers, the company pays Sh 60. A single plant can produce up to 1,000 grams of peppers per year, which drops to around 300 grams when dried. This translates to between one and three tonnes per acre.

“We never pay farmers late and always prioritize transparency, ensuring that farmers have access to safe inputs,” adds Ms van Casteren, noting that ensuring proper and timely communication via SMS has been key. to cultivate a special relationship with producers.

But more than just setting the right prices for farmers, Ecuador Kenya has relied heavily on technology to drive its business. With its products primarily aimed at sensitive consumers in Europe, traceability is crucial to obtaining the relevant certifications that open the doors of the lucrative European Union market of 27 countries.

The company uses a mobile app that collects data every step of the way, from the seeds used, through the harvested field, through the farmer’s details and the date of collection to the exported product.

Coincidentally, the eProd mobile app was developed by a chili consolidator frustrated by the lack of a supply chain management system for smallholder farmers to enable it to meet the high demands of the market. export.

In the case of Ecuador Kenya, data is collected by field agents. For efficiency, the company has fixed routes and collection centers along the coastal region to minimize transport for farmers.

Once the product arrives at the packaging plant, quality grading follows. The fresh produce is then loaded and assigned to the dryer, after which it is unloaded and updated in the system. Sorting according to customer specifications follows. The inventory module allows you to have complete information on stocks at all times.

When exporting, the company manages a 6300 kg loaded container with standard packaging, although the packaging can be standardized according to customers’ requirements.

Ecuador Kenya sells its products to large spice traders and food processors. To ensure competitiveness and distinguish its products, the company has its products under the Kenyan Bird’s Eye Chilies brand.

With the Covid-9 pandemic, company management has learned that it is important to have full control. In order to avoid stem losses during this hectic time, no cash transactions have been authorized and staff are now able to account for all items entrusted to them.

“Total responsibility. We love it! ”Says Ms van Casteren.

If the company had the option of restarting the business, the only thing it would do differently would be to seek investors early enough. Being a family business and having financed everything on its own, the company believes that if it had had an investor earlier, it probably could have grown faster and implemented a second harvest for the farmers.

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