The launch of its new subsidiary, Twiga Fresh, will allow it to farm and distribute its own produce to traders.
The 650-hectare (1,606 acres) land of Twiga is expected to produce 150,000 tons of fresh produce annually. The new venture is backed by $10 million in debt from development finance institutions.
Since launch, Twiga has used technology to link small farmers with informal traders, giving them access to new markets and a large pool of clients, all while improving the food supply chain in its markets. It has been difficult for the company to deliver on its promise of affordability and food security because of stock outs and price fluctuations. They project a better control of production with the addition of Twiga Fresh.
The volumes for other fresh products were low because we decided not to scale fresh produce where we didn't have a good record of food safety.
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The value chains of produce like bananas are more established and efficient from partner farmers.
The company says its farm is one of the largest fresh produce establishments targeting the domestic market since most large-scale horticultural businesses in the East African country export their harvests.
Most of the investment in modern commercial farming in Africa has been made in the export oriented industry because of the low formality of the domestic food market. This has led to decreasing productivity of local farming, which has impacted both quality and pricing in the market, said Njojon who founded the company with ex-CEO Grant Brooke.
The pricing on basic fresh produce is one of the highest in history and we are also seeing increasing importation of basic food items on account of this. Through building a B2B supply chain into informal retail, Twiga has been able to formalize the domestic food market using technology, putting the company in a unique situation to invest in backward integration and solve the problem of declining productivity and increasing cost of food.
Twiga is looking at new markets in Central and West Africa, and plans to start operations in Uganda and Tanzania soon.
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