Swiss giant Nestle predicts a sweet coffee break for better

By: OTIATO GUGUYU

Kenya’s coffee sector is not doing as badly as it has been portrayed. According to Nestle Senior Vice-President Africa, South Asia and Pakistan John Miller, the sector is resilient and is expected to grow given the right incentives.

Mr Miller said the firm, which has been in Kenya for 30 years, has been able to double yields for 41,000 farmers who work directly with them.

They plant coffee trees that are suited for Kenyan soils.

“What I was reading in the newspaper certainly does not reflect Nestle’s experience of business here,” he said of the Nation expose.

“We work with the local marketing agents and insist that apart from the small margin that they take, about 82 per cent to 87 per cent of the world market price, which we pay for coffee goes to the farmer,” he told the Nation in Nairobi at the Economist Growth Crossing event.

DECLINE IN PRODUCTION

Kenyan coffee has been on a decline since 1980 when farmers produced over a million bags.

This year’s saw a paltry 568,766 60-kg bags sold at the Nairobi Coffee Exchange from 671,438-kg bags in 2014.

Mr Miller said in as much as there is talk of a drop in production, it is interesting to note that Kenya produces 50,000 tonnes of coffee compared Philippines’ 15,000.

Because of low returns, some small holder farmers have uprooted their coffee and planted other crops.

The area of coffee plantations in Kenya has fallen to 109,000 hectares from an average of 150,000 hectares in 1980s and 1990s.

KENYA’S MARKET SHARE

Kenya’s world market share has since declined from 3.1 per cent in 1986 to 0.6 per cent in 2006.

Nestle buys 6,000 tonnes of Arabica Coffee from Kenya.

The firm has invested Sh71 million in a coffee plan to lure Kenyans to grow coffee.

“We have been buying coffee in Kenya for the last 30 years, we truly value the quality. That is the reason we pay the highest premium for Arabica Coffee,” said Mr Miller.

The Nestle boss said they are also working to get more women into the industry through a social project. They are being educated on entrepreneurship.

At the same time, Kenya Planters Cooperative Union has announced plans to irrigate coffee after signing a Sh30.6 billion deal with Israeli firm, Green Arava.

The Israeli company will install the irrigation infrastructure through a loan facility that will be paid off with farmers produce.

Farmers who sign up with the cooperative initiative are expected to increase their yields from the current average of 2.5 kilos a tree to 35 kilos.

Green Arava will then take 15 kilos to repay the loan and help market the coffee on the global market.

SOURCE: DAILY NATION