Kenyan listed company, Kakuzi limited is set to stop growing its trademark crop, pineapples this year after more than two decades of planting the crop and instead adopt fast moving avocados whose demand has skyrocketed globally.
The NSE-listed firm revealed the strategic shift Friday when announcing a 5.2 per cent increase in net profit to Sh561.6 million for the year ended December.
The agriculture firm attributed the profit increase to higher international avocado and macadamia prices.
“A decision was taken to discontinue the fresh pineapple operation in favour of planting the area to Pinkerton avocado. Sales of pineapple will eventually be phased out in 2018,” Kakuzi said in a statement.
The company, which also grows tea and trees in addition to livestock farming, has now decided to focus its efforts on growing avocados whose returns per acre are much higher than pineapples.
Over the past five years, avocado and macadamia have become choice crops for agricultural firms in the country with Kakuzi joining the bandwagon.
The government, early this year was forced to ban all avocado exports following a severe shortage of popular varieties, Fuerte and Hass, which are off-season, signaling just how fast moving the crop has become in recent years.
Kakuzi’s pineapple farms in Murang’a, Del Monte’s in Thika and Ndemo Farm in Kilgoris have for years been the biggest commercial producers of pineapples in the country and the company has even become synonymous with the crop over the years.
At its peak, Kakuzi had over 120 acres of its own land under pineapple and another 1,000 acres under a joint venture with juice maker Del Monte.
However, the firm closed last year with just 60 acres of its land being used to grow pineapple and the partnership with Del Monte is set to be terminated in coming years compared to 1,500 acres of land under avocado from which it harvested 7,282 tonnes of fruit that the firm closed last year with.
“Profitability within the Tea operations continued to reflect the difficult trading conditions and significant inflationary pressure on labour and other production costs.”
The increase in profit is as a result of continued market demand for avocado and macadamia throughout the year, Kakuzi said in a statement.