Technical and commercial due diligence of a horticulture processing investment for a county government in Kenya

Horticulture
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Situation

In rural areas exhibiting relatively high poverty rates, private sector agro-processing investors are often wary of unpredictable business environments and supply constraints for key processing inputs.

As a result, new investments in commercial-scale horticultural value addition and supporting services such as seed multiplication, investment in crop protection solutions, and irrigation systems are frequently talked about but executed less frequently.

Industries
Market Analysis & Opportunity Scoping
Smallholder Agriculture Development
Public Policy
Agribusiness & Food Systems
Gender Equity & Inclusion
Economic Growth & Trade
Engagement

To overcome the challenge of low investment in potentially attractive agro-processing opportunities, a county government in Kenya and ORI forged a partnership to examine the feasibility of investment in horticulture products value addition and commercialization and the role of the county government and other partners.

ORI helped the county government by:

  • Refining the terms of reference for the engagement, working with the governor and the county executive responsible for agriculture and trade.
  • Identifying specific horticulture products with scope for profitable cultivation and processing within the county and potential for national marketing in major urban markets. 
  • Conducting data and detailed research on the feasibility of processing priority crops based on their production potential, local food security dynamics, and potential value capture through processing.
  • Sizing the market and analyzing key demand growth drivers for processed products.
  • Analyzing various options of enterprise ownership to ensure commitment in smallholder participation while maintaining the attractiveness of private sector investment.
  • Modeling farmer productivity expectations based on various levels of agri-inputs and farm management scenarios.
  • Designing engineered food-processing plans, analyzing project economics, and formulating a business case.
  • Assessing a range of equipment manufacturers and proposed technology solutions based on their resource use efficiency—including water, energy—and lifecycle economics, among other factors.
Outcomes
  • A vetted strategy for how smallholder farmers would diversify incomes through the production of high value vegetables for target market opportunities.
  • A detailed business case for capital investment in agro-processing technologies, facilities and project phases.
  • Identification of technology providers and assessment of the competitiveness of various engineered processes, equipment, and machinery including recommendations for candidate suppliers.
  • Ownership options and trade-off analysis for each option, including participation by women and youth.