Kakuzi has recorded a marginal drop of 3 percent in its half-year pre-tax profit to record Ksh.276.7 million compared to Ksh.285.9 million recorded same period last year.
According to Kakuzi Chairman Nicholas Ng’ang’a, the marginal drop was due to slower market growth and price volatility in the company’s key export markets amid the coronavirus pandemic.
To sustain trading growth and mitigate market risks, Kakuzi has swiftly moved to enhance its operating efficiencies and applying a diversification and value addition strategy for opportunities in the local market.
This even as Ng’ang’a anticipates a significant drop in avocado production as the orchards enter into what is known as an ‘off’ year.
“Bi-annual bearing in avocado production is common, with an ‘on’ year yield being higher than an ‘off’ year yield. After last year’s bumper harvest, this year’s production is in an ‘off’ cycle,” said Ng’ang’a.
He said the market position in Europe for avocados is not as buoyant as experienced in previous years.
“High supply levels of avocados into Europe from Peru and COVID restrictions have occasioned downward pressure on prices. At this stage, it is too early to predict the full impact of these developments on the Company’s full-year performance, but we continue to actively monitor.”
Kakuzi is currently witnessing lower output against its avocado harvests, but macadamia nuts’ production remains within earlier projections for the year.
Positive growth at the firm continues to be registered from Blueberry sales in the domestic and regional markets.
This is due to the growing consumer preference for quality locally produced berries for catering and home consumption.
“Demand for the Kakuzi range of wood, beef and animal feed products remains encouraging, and we continue to explore additional diversification strategies for this important range of products. Unfortunately, tea production returns have not improved in the last 12 months. We are aware of the proposed new tea regulations, and we await to see the outcome of the Court process,” Ng’ang’a explained.