What you need to know:
- The Chama went into business in 2017 with an initial capital of Sh100,000.
- Last year, they bought more equipment thanks to Sh1.6 million loan from Vijabiz project.
What started as a youth group to keep members busy has turned into a thriving agribusiness that is competing with the big boys of flour business.
Henrok 6 Limited, based in Nakuru County, was started by six members in August 2016, who were keen to have an income generating activity.
“All of us were unemployed thus we were determined to keep ourselves engaged so that we don’t end up into illegal activities like drug abuse. We registered as a self-help group and did small jobs, some at construction sites, to raise capital,” narrates Boniface Mbae, the director and chairman of the group, adding they are now 10 members.
By the end of 2017, the members had managed to save Sh50,000, which was not enough to start a cereals business.
“We applied for a loan from the Youth Fund and luckily, our application was successful and we received Sh50,000. With a capital of Sh100,000, we started selling cereals at JB Road, Mawanga Estate, in Nakuru,” reveals Mbae, 31, a trained accountant.
From the Sh100,000 capital, Mbae explains, they spent Sh70,000 on a small milling machine, paid shop rent of Sh6,000, bought two 90kg bags of dry maize at Sh2,000 and a secondhand weighing scale at Sh3,500.
“We also paid Sh8,500 for a trading licence,” says Mbae. “We then started offering grade two milling services to locals and also sell dry maize for githeri.”
Variety of flour products
Last year, they bought more equipment thanks to Sh1.6 million loan from Vijabiz project, which is facilitated by Ustadi Foundation through the support from International Fund for Agricultural Development (IFAD), Technical Centre for Agricultural and Rural Cooperation (CTA) and Nakuru County Government.
“The machines we bought were two roller mills with crusher at Sh350,000 each, maize polisher at Sh180,000, stitching machine Sh27,000 and automation Sh400,000. Vijabiz also trained us on value addition skills and how to run a business,” says Mbae.
They now make a variety of flour products.
“We make Ugali Star, which is sifted maize flour and Uji Star, which is a composite porridge flour. Also we sell raw cereals at our outlet in the town. We source the raw materials from small-scale farmers in Nakuru at an average of Sh30 per kilo,” he says.
They sell 1kg of Ugali Star at Sh50, 5kg at Sh270, 10kg Sh420 and 50kg Sh2,500.
On the other hand, 400g of Uji Star goes at Sh35 and 1kg Sh80. In addition, they sell tradition porridge flour made from millet, sorghum and cassava which they blend with terere and managu.
The group has contracted 31 farmers who supply them with various cereal products.
Kebs approved products
According to Moses Karanja, the vice-chairman of the group, they check the moisture content before buying grains from farmers and processing. He adds that good grains should have a moisture content of 14 per cent to curb aflatoxin.
Some members of the group also grow cereals like maize thus offering the firm raw materials.
“We are currently processing 500 kilos of various cereals in a day. We would be doing more but Covid-19 slowdown our business when eateries and schools which we target were closed several times,” says Mbae, adding most of their products are approved by the Kenya Bureau of Standards, whereas others are in the process of approval.
Mbae says the by-products they get such as bran they sell at Sh20 per kilo to livestock farmers.
They have seven employees, three females and four males, two who are part of the group.
“Members benefit from small loans to start personal businesses, monthly stipends, medical cover and dividends,” says Mbae, adding that they sell about 9,000 kilos of maize flour and 500 kilos of porridge flour per month.
Opportunities in agriculture
To compete with the big boys of the business, they make products of different sizes and sell them at relatively low prices.
In addition, they are also in the process of fortifying their products with indigenous vegetables, to improve nutritional value, once their formulation is approved by relevant authorities.
Some of the challenges in the business include aflatoxin in maize, higher cost of product certification by Kenya Bureau of Standards, Covid-19 pandemic, scarcity of raw materials and still competition.
“Our goal is to become one of the preferred suppliers of nutritious maize flour and other indigenous flour and create more jobs to youth and women,” says Karanja.
Adding, there are many opportunities in agriculture not necessarily in crop farming, but in value addition, which can help create employment for the youth.
Carol Mutua of Egerton University notes that value addition not only helps to extends the shelf-life of produce, but also the business creates more jobs and theproducts fetches more money.
Ms Mutua adds that when processing such flours, legume flours like groundnuts and soya, which are rich in proteins and iron, should be added. In addition, groundnuts contain healthy fats which make the products more nutritious.