The Daily Nation Smart Company
Date: 15.09.2015
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How I build a giant food factory by
paying farmers promptly and fairly
Started 37 years ago, Njoro­based
plant wires about ShIO million to
farmers' accounts every month
BY FRANCIS MUREITHI
[email protected]
w
hen Thakarshi Patel
bought land at Njoro, his plan was
to grow French beans for sale in Eu­
rope. Thanks to his love for small­
scale farming, he was also keen on
supplying vegetables to his vegetar­
ian family.
carrots, cabbages, potatoes, kales,
green peas, sweet corn and fruits
from the growers.
The factory, which specialises
in canned food, tomato products,
frozen and dehydrated vegetables,
also buys spices such as coriander,
cumin, ginger, pepper, turmeric
and herbs such as sage, basil, pars­
ley and lemon grass from farmers
However, the small venture he across Kenya.
started after shifting from wholesale
The farmers are from Nakuru,
trade has ballooned into a multi­bil­ Machakos, Murang'a, Kirinyaga,
lion food processing factory.
Bungoma, Baringo and Laikipia
About 37 years since he opened counties.
shop, some of the factory peers
"When this factory started receiv­
such as battery maker Eveready, ing fresh produce from farmers 37
Kabazi Canners, Kenya Farmers As­ years ago, they were earning Sh2
sociation, Londra, vehicle assembler million per month. Today every
Sam­con Limited, Pyrethrum Board month we pay our farmers between
of Kenya are either struggling or Sh8 million and ShlO million."
have since exited the scene.
"I bought this two acres to grow Secret password
French beans as I wanted to exploit
The factory also benefits Egerton
the European market and also earn University students studying food
my country foreign exchange," he technology, who come to sharpen
their skills through internship.
recalls.
"We started with four employees
That, however, changed drasti­
cally. As the yield doubled, he but today we have employed more
secured international orders and than 400 people among them 20
to earn better, he turned to value graduates," said the 75­year­old
addition with the opening of Njoro
Canning Factory.
CEO­cum­chairman of the com­
pany.
So how has Mr Patel been steering
the canning factory?
"The secret password is paying
farmers promptly. We pay our farm­
ers three weeks after delivery. If
farmers are not paid on time, they
won't tend their crops, translating
also borrowed from the bank and into poor yields and poor returns to
relatives, the lion share of the capi­ our factory," said the father­of­four.
Besides offering good prices for
tal came from my savings," said Mr
deliveries, the farmers are trained
Patel.
His farm has since expanded to 14 on land use, application of fertilisers
and use of certified seeds.
acres. And to ensure steady supply
Mr Patel, who has spent 53 years
of raw materials, he has contracted
In January 1982, armed with Sh20
million savings from his wholesale
business that he operated between
1965 and 1978, he bought equipment
and set up a small processor.
"Never underestimate the power
of saving for a rainy day. While I
over 5,000 farmers from seven in business, says the factory's daily
counties. His factory buys tomatoes, output has increased to 50 tonnes
Ipsos Kenya ­ Acorn House,97 James Gichuru Road ­ Lavington ­ Nairobi ­ Kenya
The Daily Nation Smart Company
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per day from 400 cans despite a
stiff competition.
"If we pay our farmers ShlO mil­
lion a month, our 400 employees
have never complained of salary
delay, and the factory is still receiv­
ing fresh produce from farmers then
it would be wrong to say that we're
not making profits," he said.
But he has also been facing hur­
dles. "The introduction of cheap
imports is hurting our market," said
nance, the spiralling interest rates is
a stumbling block to our expansion
plan," said Mr Patel, who is a direc­
tor of Horticultural Corporation
Development Authority.
European market
To access the European market,
the factory observes high standards
of hygiene. "Workers must wash
their hands before starting their du­
ties. Their shoes must be disinfected
at the entrance," said managing di­
"Besides a ballooning wage bill, rector Sudheer Vaia, adding that
rising electricity bill and high cost entire plant is washed daily.
Mr Patel says a vital business les­
of drilling water and factory mainte­
Mr Patel.
Factory started in 1982
by Mr Thakarshi Patel
Factory has contracted
over 5,000 farmers from
seven counties to supply
tomatoes, carrots, cab­
bages, potatoes, kales,
green peas and fruits.
son he has learnt is the need for con­
tinuous quality improvement. One
must invest in the latest machinery,
treat the workers as partners while
farmers' issues must be sorted out
on the spot, he says.
"By 2030 we hope to make a ma­
jor expansion to accommodate at
least 20,000 farmers and turn the
factory to specialise in a variety of
food products," he said.
The Kenya Defence Forces,
disciplined forces, Kenya Wildlife
Services and various supermarkets
in Kenya provide the entrepreneur
with a ready market.
Patel, adding that the plant
produces 50 tonnes of
products per day.
Factory has employed
over 400 workers currently.
"By 2030 we hope to
make a major expansion
to accommodate at least
"We pay our farmers
ShlOm a month," says Mr
20,000 farmers," adds Mr
Patel.
Ipsos Kenya ­ Acorn House,97 James Gichuru Road ­ Lavington ­ Nairobi ­ Kenya
The Daily Nation Smart Company
Date: 15.09.2015
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IF WE PAY OUR FARMERS SH10M A MONTH,
OUR 400 EMPLOYEES HAVE NEVER
COMPLAINED OF SALARY DELAY, AND
THE FACTORY IS STILL RECEIVING FRESH
PRODUCE FROM FARMERS THEN IT WOULD
BE WRONG TO SAY THAT WE'RE NOT
MAKING PROFITS"
— Njoro Canning Factory owner Thakarshi
Patel
Ipsos Kenya ­ Acorn House,97 James Gichuru Road ­ Lavington ­ Nairobi ­ Kenya