In February 2016, Promar helped organize a business mission to Kenya for 15 Japanese private sector companies interested in business opportunities in the Kenyan food and agriculture value chain, as part of a Japanese Ministry of Agriculture, Forestry and Fishery-funded initiative to support development of food value chains in Africa. The Japanese companies came from various industries, including beverage, cold chain equipment, trading and logistics; some were experienced in African markets and some were interested in exploring Kenya as a new market. Japanese investment in Kenyan food and agriculture is generally in its early stages, although there are already several major ongoing Japanese investment projects, including in agricultural inputs (agrochemicals and fertilizer) as well as in agricultural products such as rice. Many mission participants felt they saw positive business opportunities within Kenya’s food chain, even in the very short term.
One of the sectors which struck the Japanese companies was the chicken industry. Demand for chicken has been growing in Kenya, as the number of middle-income consumers increases and the food service industry becomes more dynamic. For example, Toridoll, a Japanese-owned teriyaki chicken fast food chain, has been enjoying strong popularity among urban Nairobi consumers of many different age groups. Nakumatt, the country’s largest retailer uses the slogan ‘value for money’, to offer whole chickens – not boneless chicken which is more expensive – to appeal to a wide-range of consumers. One participant from a leading Japanese trading company said, “I was able to see that the Kenyan chicken business has high potential. Now I would like to visit poultry farms and do further research on the industry.”
Promar helped arrange meetings for the participants with local companies such as Bio Food Products which offers (functional) dairy products, Kenya Meat Commission (KMC) and Kenya Horticulture Council, and visited their processing factories. Through these meetings Japanese participants aimed to understand Kenyan food and agricultural markets, from the stages of production to consumer preferences, and finding possible business partners or clients. Discussions between the Kenyan companies and Japanese visitors were very active, with lively rounds of questions from both sides.
While Promar has found that sourcing stable quality and quantities of raw materials is still a challenge throughout Kenyan value chains, these visits and discussions allowed the participants to understand the attractiveness of the Kenyan agri-food industry as well as the retail sector. As one participant from the vegetable/fruit sector commented, “The value chains for export products like horticultural crops are quite advanced. Although the competition seems tight and we need to consider entrance strategies, there is a good base here for business.”
The Japanese mission participants were also keen to network with Kenyan government authorities, which could support their business in the country. In addition to the business mission, Promar also coordinated a policy dialogue and workshop to promote public-private partnerships together with the Ministry which attracted over 100 participants in total. These events were great opportunities for Kenya and Japan to establish industry connections and seek areas of collaboration.
Based on the enthusiasm shown during the mission, Promar expects to Japanese investment in the Kenyan food and agricultural industries begin to grow.
Photo 1 Teriyaki chicken on noodles by Teriyaki Japan
Photo 2 KMC’s processing site
Photo 3 Chicken products at supermarket