Bringing to Lamu its First Ever Processing Plant

Bringing to Lamu its First Ever Processing Plant

Photo:

ENP staff share with the Lamu Governor and the British High Commissioner the site plan for the processing plant

March 2024 - The Cashew Value chain sector in Kenya has the huge potential to evolve into a large, export-oriented sector due to its tree crop being well suited to the variables of weather in which its planted. Currently cashew nut farming is a major cash crop in coastal Kenya where more than 70,000 smallholder farmers produce the nuts. The nuts are predominantly grown in Kwale, Kilifi, Tana River, Mombasa and Lamu Counties with the industry employing 4,000 people and 50,000 people indirectly1. Globally, more than 60% of Raw Cashew Nuts (RCNs) come from Africa yet less than 10% is processed within. The weak processing capabilities that Sub-Saharan countries have reduce the prospects of value addition and result in local African economies receiving a tiny proportion of the value created by the sector. In Kenya, the lack of processing facilities has made farmers depend on middlemen who often offer low prices and irregular payments leading to a decline in production over the years. Low farm gate prices for cashew have contributed towards the reduced interest by the farming community in the cashew growing zone. Widespread tree felling for supply of \ 1

Kenya Agricultural and Livestock Research Organisation

firewood for domestic and industrial use are a major threat to the existing tree populations overshadowing the ongoing replanting initiatives. The total production reduced from 12,801 tonnes reported in 2020 to 9121 tonnes recorded in 20212.

With support from the UK Government through the Sustainable Urban Economic Development Programme (SUED), Lamu Municipality is being supported to address these challenges. The programme is working with Lamu Municipality to address the lack of significant industries that can drive its economic growth.

With major cashew nut growing areas across the wider county which have the potential to produce more than 15,000 ton of raw nuts annually there is need for a collaborative effort between the county and a private sector player to address the challenges facing the industry in Lamu. To assist with the this, the programme has partnered with Equatorial Nut Processors (ENP) to establish a cashew nut processing plant in Lamu Municipality with a focus on producing Raw Cashew Nuts (RCN) and roasted/salted kernels. The main target market for these products will primarily be local sales, with any surplus quantities being exported. The processing plant will involve cashew shelling, drying, roasting, salting and packing as well as the exploration of harvesting cashew nutshell liquid which has a wide range of industrial applications. SUED’s partnership with ENP will see the factory process 142MT of raw cashew in the first year increasing to 3,500MT within 5 years. To support the establishment of the plant, the County has provided 5 acres of land on a subsidised 50-year leasehold. By having the processing plant close to the farms, the transportation costs will be greatly reduced increasing the prices that are offered to farmers resulting in better household incomes for the people of Lamu.

SUED catalysed £1.775 million (~Kes340m) in funding to set up the operations in Lamu, the programme has providing technical assistance to the private firm and the county to ensure that collaboration between them is prioritised to see the fruition of the project. SUED has also provided £488k (~93.37m) in seed fund \ 2

Kenya Agricultural and Livestock Research Organisation

support to support the construction and equipment purchase.

In its first year of operation, the plant will provide 120 direct jobs who will assist in the processing and packaging of the RCNs. In addition, the plant will create 240 induced jobs and impact over 1500 farmers who will benefit from the improved prices, this will gradually increase to 7,000 farmers in 5 years. The facility will also utilise plant waste as an energy source to promote circularity. Together with the County, ENP will promote climate-smart agriculture practices like conservation agriculture and agroforestry to enhance productivity and climate resilience among the farmers.

This introduction of a medium scale processing facility in Lamu has the potential to serve as a catalyst for further investments in the region, leading to the creation of sustainable employment opportunities, increased productivity, and commercial activity.