Weetabix to source 50% of its wheat from local farmers

Cereal processor Weetabix East Africa is targeting to cut its wheat imports by 50% and instead start buying the grain from local farmers. The company has been working with a local wheat farmer in Narok who is expected to supply 26,000 bags of 90 kilogrammes, which is slightly higher than half of its requirement. Weetabix has in the past opted for imports because of the high market prices local farmers demand for their produce.
Currently, the firm is paying Sh2, 800 per 90-kg bag on imported wheat while the same quantity is retailing at Sh4, 000 locally.
Jack Fredrick, head of procurement at the firm says talks are already underway: “We are engaging one commercial farmer in Narok whose harvest we anticipate will meet half of our required capacity. As a company, we would want to buy wheat from local farmers, but at a fair price that enables us to be competitive and cushions consumers of our products against price increases.”
The firm has been offering technical support to the farmer, including teaching him best agronomical practices meant to cut production costs, which are often cited for the higher prices. The programme, however, is still at the pilot stage with Weetabix targeting to recruit about 20 farmers.
He added that Weetabix had increased its capacity, which required them to rely on both local and imported wheat for a steady supply of the raw material.
The UK-owned cereal processor invested over Sh200 million in the expansion of its Nairobi factory last year to meet the growing needs of an expanding middle class.
It has so far increased production to 3.6 million kg per year from 1.8 million kg. The demand of the breakfast cereals was 2.8 million kg in 2014 compared to 2.4 million kg in 2013.
Kenya does not produce enough wheat to meet its annual demand as only 350,000 tonnes is produced against a consumption of 900,000 tonnes. – BusinessDailyAfrica