OgwaluMapesa
JF-Expert Member
- May 24, 2008
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The entry of a Tanzania-based miller into the local flour production industry is causing jitters among established milling companies and some cereal farmers.
There are fears that the milling company, which will operate under the umbrella of the giant Bakhresa Group of Companies, may deny farmers a market for their produce should it opt to procure maize and wheat from across the border.
The chairman of Rift Valley Farmers Stakeholders Forum Justus Monda told the Sunday Nation that although he supported additional investment in the country, he was wary because millers had a habit of exploiting farmers.
He expressed fears that a company with deep roots in the region would have an unfair advantage over local companies by cheaply sourcing raw materials from across the borders.
We read mischief in plans by this firm with a strong establishment in other countries to put up a milling plant in the country. They must assure us they will first exhaust the maize and wheat we produce before looking beyond the borders, he said.
The Bakhresa Group of Companies has a presence in Tanzania, Zanzibar, Uganda, Rwanda, Burundi, Zambia, Malawi, Seychelles and Mozambique. Construction of a milling plant in Mariakani, Mombasa, is underway. Once completed, the plant will process 860 metric tonnes of cereals a day at full capacity. The cost of putting up the plant is estimated at $50 million (Sh4.2 billion).
Ms Virginia Nthenya, an employee at one of the smaller milling plants, said she was afraid the giant miller would stifle the growth of local flour millers.Many jobs will be lost if proper policies are not put in place to protect small-scale millers from being suffocated by the big players in the cereals industry. There is a need to ensure the entry of foreign companies does not spell doom for local companies.
But Bakhresa Group of Companies Executive Director Abubakar Said Bakhresa said they would give local produce priority and only import cereals as a last resort to bridge any deficits in accordance with government trade regulations.
Competition He observed that Kenya is well endowed with vast business opportunities that have remained untapped by local entrepreneurs due to inadequate capital.
We need competition. It leads to high quality products at lower prices compared to when dealing with a monopoly, Mr Bakhresa said.
He said the company had so far created 300 jobs in Kenya as they pursue their expansion plans, adding that they would help the government break up the cartels that have done little to bring down the cost of living.
Many millers in Kenya work and act on a take-it-or-leave-it attitude and at times provide sub-standard products to customers. We want to improve standards, he said.
Also quick to allay farmers fears was Agriculture Secretary, Mr Felix Kosgey, who said there were enormous investment opportunities in the agriculture sector that if well utilised would boost national efforts to fight hunger and ensure food security. He assured potential investors that the government would provide an enabling environment for business.
I am not aware of that particular companys plans to start a milling plant in the country, but farmers should not be worried. The government cannot allow them to be exploited, said Mr Kosgey.
The Cabinet Secretary said investors who are allowed access to the Kenyan market must operate within the laws governing cross-border investment. Of critical importance, the minister said, investors must source all available raw materials locally before looking for alternatives outside the country.
Importation of goods is guided by the law and such legislation is made with the interest of Kenyans at heart, he said. Mr Anthony Kioko from the Cereal Growers Association also welcomed the development saying that the miller would provide a potential market for their production.
Millers who are already operating say their machines are not fully utilised, but if this investor has done a feasibility study and proved otherwise, so be it, said Mr Kioko.
There are fears that the milling company, which will operate under the umbrella of the giant Bakhresa Group of Companies, may deny farmers a market for their produce should it opt to procure maize and wheat from across the border.
The chairman of Rift Valley Farmers Stakeholders Forum Justus Monda told the Sunday Nation that although he supported additional investment in the country, he was wary because millers had a habit of exploiting farmers.
He expressed fears that a company with deep roots in the region would have an unfair advantage over local companies by cheaply sourcing raw materials from across the borders.
We read mischief in plans by this firm with a strong establishment in other countries to put up a milling plant in the country. They must assure us they will first exhaust the maize and wheat we produce before looking beyond the borders, he said.
The Bakhresa Group of Companies has a presence in Tanzania, Zanzibar, Uganda, Rwanda, Burundi, Zambia, Malawi, Seychelles and Mozambique. Construction of a milling plant in Mariakani, Mombasa, is underway. Once completed, the plant will process 860 metric tonnes of cereals a day at full capacity. The cost of putting up the plant is estimated at $50 million (Sh4.2 billion).
Ms Virginia Nthenya, an employee at one of the smaller milling plants, said she was afraid the giant miller would stifle the growth of local flour millers.Many jobs will be lost if proper policies are not put in place to protect small-scale millers from being suffocated by the big players in the cereals industry. There is a need to ensure the entry of foreign companies does not spell doom for local companies.
But Bakhresa Group of Companies Executive Director Abubakar Said Bakhresa said they would give local produce priority and only import cereals as a last resort to bridge any deficits in accordance with government trade regulations.
Competition He observed that Kenya is well endowed with vast business opportunities that have remained untapped by local entrepreneurs due to inadequate capital.
We need competition. It leads to high quality products at lower prices compared to when dealing with a monopoly, Mr Bakhresa said.
He said the company had so far created 300 jobs in Kenya as they pursue their expansion plans, adding that they would help the government break up the cartels that have done little to bring down the cost of living.
Many millers in Kenya work and act on a take-it-or-leave-it attitude and at times provide sub-standard products to customers. We want to improve standards, he said.
Also quick to allay farmers fears was Agriculture Secretary, Mr Felix Kosgey, who said there were enormous investment opportunities in the agriculture sector that if well utilised would boost national efforts to fight hunger and ensure food security. He assured potential investors that the government would provide an enabling environment for business.
I am not aware of that particular companys plans to start a milling plant in the country, but farmers should not be worried. The government cannot allow them to be exploited, said Mr Kosgey.
The Cabinet Secretary said investors who are allowed access to the Kenyan market must operate within the laws governing cross-border investment. Of critical importance, the minister said, investors must source all available raw materials locally before looking for alternatives outside the country.
Importation of goods is guided by the law and such legislation is made with the interest of Kenyans at heart, he said. Mr Anthony Kioko from the Cereal Growers Association also welcomed the development saying that the miller would provide a potential market for their production.
Millers who are already operating say their machines are not fully utilised, but if this investor has done a feasibility study and proved otherwise, so be it, said Mr Kioko.
