By Cece Siago
Coconut farmers in the Coast region are set for a potential market boost after the government announced plans to expand coconut value addition by supporting processors and exporters.
The plan includes tax incentives for manufacturers, streamlined licensing and the use of special economic and export processing zones to lower production costs and attract investors into coconut processing.
Speaking while visiting Kentaste Products Limited in Kwale County, Investment Promotion Principal Secretary at the Ministry of Investments, Trade and Industry Abubakar Hassan said the Coast has a rich coconut resource but it is not being utilized because of poor markets and little processing.
“We have about 100,000 coconut farmers and nearly 10 million coconut trees. The resource base is estimated at Sh300 billion, but the problem is that there are no offtakers and very little value addition,” Hassan said.
He said farmers often struggle to sell their coconuts because there are few buyers, adding that even when coconuts are purchased, most are sold raw with minimal processing.
“As a ministry, we have prioritized coconut as an important value chain in the coastal region, and we are working with large players like Kentaste to scale up so they can buy coconuts from farmers,” Hassan said.
The government is encouraging farmers to supply their produce directly to expanding processing firms, saying increased capacity would help absorb coconuts from across the Coast and beyond.
Hassan said special economic zones and export processing zones would play a key role in supporting manufacturers through tax incentives and reduced regulatory requirements, enabling them to produce competitively and access export markets.
Investments Principal Secretary Abubakar Hassan (right) views some of the processed coconut oil at the Kentaste processing plant in Kwale County. He said government is set to improve coconut farming through promoting value addition. PHOTO BY CECE SIAGO
“The number one risk for any investor is the market, which is why we are diversifying markets beyond Kenya. The second risk is regulatory, and we are streamlining licensing to make it more responsive. The third is tax, which we are addressing through EPZs and SEZs,” he said.
Kentaste Chief Executive Officer Kyle Denning said the company’s growth has been driven by sourcing coconuts from smallholder farmers, particularly older farmers across the Coast.
This came as he announced plans of the company that produces coconut oil, milk, cream, flour and desiccated coconut, expanding operations to Lamu and Kilifi county where many coconut farmers are found.
“We were sourcing about 5,000 coconuts a day, but today we are sourcing almost 1.5 million coconuts per month,” Denning said, adding that they work collaboratively with county governemnts.
However, he noted that coconut production remains vulnerable to rainfall variability. “If it does not rain this year, things will be difficult for us. We are in the coconut space and we are praying for rain,” he said.
Denning said the company employs more than 300 full-time workers and supports over 50,000 livelihoods indirectly, adding that value addition is creating jobs for youth while strengthening markets for farmers.
“All the processes involved in value addition create jobs in the community rather than only supporting farmers,” he said
Kentaste CEO Kyle Denning speaking during an interview where he said the company depends on coconuts from local farmers. PHOTO BY CECE SIAGO
According to Kwale Trade and Tourism CEC Michael Mutua, further efforts were taking place to increase the reducing numbers of coconut trees in Kwale County.
“We are distributing free seedlings because the previous number of coconut trees that we have is not what has been there before,” he said.
He added that the seedlings were hybrid to ensure faster growth and continuous supply to value addition industries.
Coconut continues to be a key cash crop along Kenya’s Coast, supporting livelihoods in Kwale, Kilifi, Lamu and parts of Tana River counties.
But weak markets and failure to process has forced many farmers to sell them at low prices or leave the produce unsold.
