Kenyan fruit juice tycoon Kimani Rugendo invests $2.3 million in breeding potato seed

Kimani Rugendo, the Kenyan industrialist behind the Afia and Pick 'N' Peel juice brands, has invested about 300 million shillings, roughly $2.3 million, in developing certified potato seed, taking his beverage company into a part of the agricultural chain that almost no Kenyan private firm occupies.

Kevian Kenya Limited, the company Rugendo founded, has built tissue culture laboratories, greenhouses and field trial sites, and has produced its own potato variety, named RAM, which has been approved by the Kenya Plant Health Inspectorate Service and is now being commercialised more than five years after clearance. The company set out the scale of the operation to Business Daily in a report published on Wednesday, Sept. 9. Dollar conversions are at 129.44 shillings to the dollar, the rate on Sept. 9.

Rugendo also chairs the National Potato Council of Kenya, the industry body, which puts him at the centre of the sector as Kenya prepares to host the 13th World Potato Congress in Naivasha in October, the first time the event has been held in sub-Saharan Africa.

Why a juice maker went into seed

Kevian is 35 years old and employs more than 1,400 people across its operations. It began with Mt Kenyan bottled water, sold to Mombasa hotels and Nairobi supermarkets, and moved into ready-to-drink juice with Pick 'N' Peel and later Afia. Those brands now sell in Uganda, Tanzania, Ethiopia, Sudan and Zambia. The company processes roughly 200 tonnes of fruit a day, most of it bought from outgrowers because its own land cannot supply enough.

About a decade ago the company concluded that the mangoes, tomatoes, carrots, pineapples and oranges feeding its beverage lines were businesses in their own right, and pushed into snacks, dried fruit and potato products.

Potatoes brought a problem the fruit lines had not. Prices collapse when the harvest peaks and spike when supply tightens, which makes it close to impossible for a processor to plan production runs or lock in volumes. Rugendo traced the volatility back to seed. Certified planting material is scarce in Kenya, and most growers replant their own tubers year after year, with little crop rotation.

The yield gap is the evidence. Kenyan potato yields average around 10 tonnes a hectare. Farmers using clean seed and modern methods reach 40 to 50 tonnes, and in some cases 60.

How the operation works

At Gatanga in Murang'a County, Kevian propagates planting material through tissue culture, cloning clean plant tissue under laboratory conditions before moving it through mini-tubers and micro-tubers and into greenhouses that use hydroponics and aeroponics.

Nathan Kyenze, an agronomist at the company, said the laboratory produces around 25,000 in-vitro plantlets on an ordinary day, rising to 75,000 rooted plantlets when demand spikes.

David Kimuhu Muchiri, Kevian's potato seed manager, said the nursery propagates roughly 10,000 seedlings a week, about 40,000 a month, enough to plant two acres at nursery stage. Material from those two acres can supply planting stock for around 20 acres four months later. Seedlings leave the nursery at about 15 centimetres, after roughly three weeks of nitrogen, phosphorus and potassium feeding, and produce eight to 10 tonnes an acre every four months in the field.

Kevian farms slightly more than 500 acres in the Meru region, including its Timau operations, and never plants all of it. It works in blocks of about 20 acres, scaling to around 100 acres at a time and resting or rotating the remainder to protect soil health and hold down disease pressure.

The company works with more than 3,500 farmer groups, sending agronomists to growers producing potatoes alongside mangoes, carrots, tomatoes and pineapples, and runs a training facility at Kitengela under Kenya's technical and vocational education system. The model trains a smaller group of trainers who then teach their own communities, supplemented by specialists from seed companies, fertiliser firms and equipment makers.

The market Rugendo is aiming at

Kenya produces between 2 million and 3 million tonnes of potatoes a year, worth more than 50 billion shillings, about $386 million, at the farm gate. An estimated 3.5 million people depend on the crop. Potatoes are the country's second most consumed agricultural product after maize.

The country nonetheless imports processed potato products from Egypt, Europe and North Africa, because local processors cannot secure consistent supply of the right varieties in the right volumes. Rugendo pointed to fast-food chains including KFC as the obvious import substitution target if farm productivity rises and processors build supply chains they can rely on. "We have been living on maize for too long," he said, listing starch, snacks, frozen products and animal feed as end markets.

Two constraints remain unsolved. Rugendo puts mechanisation in the sector below 35 percent nationally and argues Kenya needs simple equipment, including hand-driven tillers, to make farming viable for young people and women. Storage is the other gap. Without it, growers sell immediately after harvest to avoid losses, which floods the market and crashes the price, a discipline cereal farmers are not subject to because they can hold stock.

Kevian is pursuing the downstream side itself, working on dehydrated fruit, snacks and frozen potato products, while keeping its laboratory focused solely on seed development.

Rugendo, who is in his 70s, started Kevian with 25 million shillings raised from his own savings and contributions from friends after losing the Lang'ata parliamentary seat in the 1992 election, when he chaired the Ford-Asili party's Nairobi branch. He founded the business with his wife, Helen, and two of his sons work at the company. He has said before that he would like Kenyans to own a majority of the country's businesses, and has previously floated the idea of listing Kevian on the Nairobi Securities Exchange as part of his succession planning, without giving a timeline.

Building a seed system capable of delivering first, second and third generation stock took the company more than seven years.