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Company Reports - Vegpro Kenya Ltd  

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Vegpro Kenya Ltd

Premium & Prepared Vegables

Written by Rebecca Waters & Produced by John Holliman

Kenya's horticultural industry is the country's largest source of income and companies like The Vegpro Group ensure that most of this produce appears on supermarket shelves shortly after it is harvested.
Premium & Prepared Vegables

Kenya's horticultural industry is the country's largest source of income and companies like The Vegpro Group ensure that most of this produce appears on supermarket shelves shortly after it is harvested.

Founded in 1979 by KC Patel and the current Managing Director Bharat Patel, The Vegpro Group is Kenya's largest exporter of fresh vegetables to the supermarket trade in the UK and Europe. One of the Group's strengths is that it often needs less than 48 hours to transport produce to its customers overseas. The Group's modern air-conditioned facilities are located within the cargo area of Jomo Kenyatta International Airport in Nairobi, which means that products can be delivered to flights shortly before departure time, ensuring that there is no break in the cool chain.

VEGPRO KENYA
Vegpro Kenya is one of the operating companies of The Vegpro Group and deals with premium and prepared vegetable processing. "Our core expertise is growing crops in Africa and adding value," explains Vegpro Kenya Ltd Director James Cartwright. These include a wide range of vegetable crops including runner beans, french beans and sugar snap peas, as well as other speciality items specifically used as ingredients in the prepared product mixes, which are grown on eight different farms located throughout the highlands of Kenya.

The Group also collaborates with around 2,500 small holders in order to meet its obligations under the supply contracts with European supermarket chains and other customers. Most of these small farms are family-run operations, which usually cover one hectare. 90 percent of Vegpro's production of over 250 tonnes per week of pre-packed and prepared vegetables is exported to the UK with Sainsbury's being the largest customer followed by Tesco and M&S. Marks and Spencer is a fairly new client for Vegpro, having inherited a lot of prepared business from a competitor that went out of business.

Vegpro also has a substantial investment in flower production, the brainchild of the Floriculture Director Umang Patel the son of the company's founder KC Patel, with 95 hectares of greenhouse rose production and exporting around 2.5 million roses per week, 40 percent of which go to Tesco in the UK.

But this does not mean that Vegpro has escaped the challenges presented by the slowdown, says Cartwright. "We are in a business where we are very exposed to two things: the cost of oil because 55 percent of our total cost is freight; the second thing is the dollar pound exchange rate - 50 percent of our cost is in dollars but 80 percent of our income is in pounds," he explains. "The movement of the pound versus the dollar has a significant effect on our bottom line."

To overcome this, Vegpro Kenya has been very critically analysing costs throughout the supply chain. "We have been very successful in doing that," says Cartwright.
To further increase efficiency, the company has implemented kaizan on the flower side, which has also been very successful, particularly in making labour more efficient. The company has also seen a significant improvement in quality.

QUALITY
Quality and innovation are two of the main driving forces within The Vegpro Group and both on farm and within the packing process, there is an extensive quality assurance system following HACCP principles. Vegpro is also accredited to 14 different audit standards, including GLOBALGAP, which all of its farms are certified to.

According to the Group, Vegpro prides itself in being innovative and is therefore, always keen to work with both old and new customers in developing new products or product presentation formats.

"Product development is a three legged stool," Cartwright explains. "It is the customer, eg Sainsbury's, our marketing agents in the UK, Flamingo UK Ltd, and ourselves; we all work closely together on that."

The Group is also a big believer in Fairtrade. All of its roses are certified and Vegpro is hoping to move into Fairtrade vegetables in 2010. "Through Fairtrade we are also putting a lot of money back into the local community, supporting schools, hospitals, libraries and children's homes, as well as a number of other initiatives," Cartwright explains.

VEGPRO'S FUTURE STRATEGY
Despite the challenges presented by the recession, Vegpro's board have a clear direction of where they want to go and what they want to achieve in the future, Cartwright explains. "We have two strategic objectives, one, to do more cropping for the local market because there is a lot of opportunity in the Kenyan market. We are also looking for a more international footprint; this could be through a joint venture or by setting up our own companies elsewhere," he says.

Energy products will be another development area for the business and the group is currently looking at growing crops that will be used for anaerobic digestion to produce biogas. This will be achieved through a joint venture with Biojoule a leading UK company working in the field of innovative energy solutions.

To quote Cartwright, "the sky is the limit".

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