Agro Industrial Park Development in Kenya

Moses Nyabila and Eduardo Bacolod

The Government of Kenya through its agencies, corporations and parastatals, in partnership with investors, development partners, and lenders have been proposing the establishment of specialized strategically located industrial parks to attract large scale catalytic investment into  agricultural sector. The infrastructure aims to expand job opportunities, diversify the economy, shore up export,  and improve food security.

The government estimates that there will be around  5,000 hectares of industrial real estate and some 1,000,000 hectares put into commercial production of crops and livestock. There will be over 250,000  manufacturing and agri-production jobs to be created. Self-sufficiency in food and nutrition is then achieved by the country. It is estimated over 3 billion US$ in foreign direct investment will be generated. Finally, the expanded export of value-added agricultural products will be attained.

The Agro-Industrial Park Definition

The Ministry of Food Processing Industries (MOFPI) of India defines the scheme of “The Mega Food Park.”  as a  mechanism that links agricultural production to the market by bringing together farmers, processors, and retailers so as to ensure maximizing value addition, minimizing wastage, increasing farmers income and creating employment opportunities particularly in rural sector. MOFPI further states that the scheme applies the  “Cluster” approach and envisages the creation of state of art support infrastructure in a well-defined agricultural/horticultural zone for setting up modern food processing units in the industrial plots provided in the park with the well-established supply chain. Finally, the mega food park scheme identifies the components, which typically consist of supply chain infrastructure including collection centers, primary processing centers, central processing centers, cold chain and around 25-30 fully developed plots for entrepreneurs to set up food processing units.

The food park model in India was initiated with the assistance of the Wageningen University and Research of the Netherlands (WUR). While the India’s definition is an operational one, the WUR and India definition are clearly similar. WUR  just outlines the integration of components, spatial integration, economic transformation, and employment generation in an academic fashion. According to WUR,  “A typical food park is  spread over 500 to 1,000 hectares of land that  encompasses all the aspects of food supply chain and energy production that  facilitates the integration of various agribusiness value chain components with spatial integration of different agro-production chains, processing units, and non-agro functions. Every food park provides vital scope for economic transformation and employment generation including domestic and international tourism. The food park is easily accessible by road, rail, sea, and air. In Kenya, the agro-industrial park combines sustainable exploitation of an agrarian area of several hundreds of square kilometers with industrial processing units to realize high added value.

Agro-Industrial Park Model

For Kenya, we envision the food park to adjust according to the specific situation by area.  As India adapts too according to its existing situations, in Kenya we consider the factors such as institutional partners involved, the strategic location being close to an urban area or in an international seaport, strategic advantage for the availability of energy product, and the existing agricultural production systems in the ara. On this basis, we have identified the following models:

Co-generation Model

The Geothermal Development Corporation (GDC), which was incorporated in December 2008 and commenced operations in 2009. The creation of GDC was based on the policy of the Government of Kenya that focuses on ensuring efficiency and self-sufficiency in the supply of electricity.

One of the four geothermal projects of GDC is the Menengai Geothermal Project, which has an estimated potential equivalent to 1600 MW. The project commenced in February 2011.  GDC has purchased 7 deep drilling rigs that are used by a Kenyan crew for drilling geothermal wells. So far,  GDC has only realized 135MW of steam of the wellhead.

Aside from the use of the geothermal facilities for electricity generation, GDC has been mandated to explore the geothermal by-product for other productive purposes.  The company has set up a direct-use demonstration project in Menengai to show how geothermal by-products would be used in greenhouses, leather tannery, meat processing,  and development of spas.  The results are ready for large scale commercialization.

Geothermal cogeneration also named as combined heat and power (CHP) means the simultaneous generation of more than one useful form of geothermal energy. In a geothermal cogeneration system, the geothermal resource is decoupled for simultaneously using it for electricity-production, heating purposes,  and direct uses like greenhouses or spas. For direct uses, the supplied utilities have to be very close to the plant. The cascading use of energy from high-to low-temperature makes cogeneration more efficient than separate geothermal systems for electricity and heat production. From the viewpoint of optimization of efficiencies combined CHP is optimal.  (Source: GEOFAR: Innovative geothermal technologies) 

Urban Food Park Model

At the Urban Food Park, intensive and footloose agricultural production finds sustainable ways for integration with the chemical industry, located in a densely populated seaport or inland port. The principles of industrial ecology are realized by exchanging fertilizers, organic waste, methane, CO2 and heat between and among the various sectors. In a snapshot, we describe this model as follows:

  • The seaport/inland ports are important with a view to supplying energy and animal feed
  • The population center is the market, which can be supplied with fresh daily products without any logistic difficulties. Making effective use of costly space is achieved by stacking various activities
  • The park provides in the following functions: greenhouse horticulture and other types of indoor cultivation, protein production (pigs, poultry, fish and insects), slaughterhouses, meat processing, waste sorting and upgrading, finishing products, biorefinery, the production of organic fertilizers, support activities such as packaging and storage.
  • The exchange between sectors has its high-tech basis in ICT and biotechnology
  • Chain directors enforce collaboration between separate units
  • Urban Food Park (varying between 30 and 100 ha) is situated in the Kisumu  bay area near the pier

University Science and Technology Park

This model is anchored inside or in an area close to a university. The best existing model is the Cornell Agri-Tech owned and managed by Cornell University in Geneva, New York and the latest established by Unilever at Wageningen University and Research in the Netherlands. In Kenya, Egerton University in Njoro area has expressed interest to participate. We outline the university model as follows:

· This Agro-industrial park combines sustainable exploitation of an agrarian area of several hundreds of square kilometers with industrial processing units to realize high added value

  • Its clustering of production and processing activities leads to a reduction in the transport of raw materials and semi-finished products
  • Production consists of fiber crops, protein and starch crops and extensive animal breeding  Several products are grown simultaneously on each plot in order to reduce the risk of diseases associated with monoculture
  • The aim of the processing industry is to extract high-grade components and to exploit low-grade components by applying separation technology, sorting residual waste, making organic manure and generating power
  • A knowledge institute maintains relations with the park, developing new applications and processing methods for the park’s end products (semi- manufacture) to generate products with high added value.
  • The park, which for illustration purposes is situated in the Molo-Njoro Area, covers approximately 30,000 ha.

Multipurpose Agro industrial Park  in Peri-urban and Rural Areas

The essence of a Multipark is that the quality of the rural area is dramatically increased by interweaving agrarian production functions with other social functions such as forestry, recreation,  and housing. We outline this model as follows:

  • In this design, intensive stock farming is practiced on a large scale while being strongly concentrated
  • The park combines a number of activities: intensive stock farming (pigs, poultry), extensive stock farming (dairy, beef), vegetable production (arable farming, mushrooms), forestry (production forest, recreational forest), fruit cultivation, energy production (biomass from wood, poultry manure, and waste products from arable farming and horticulture), recreation (agrotourism) and housing
  • A regional partnership of entrepreneurs and research agency takes control of the innovation process
  • Its possible location is thought to be an area of approximately 100 km2 or 10,000 hectares in Transnzoia, Uasin Gishu and West Pokot Counties centered around Kitale ADC

The Plan of Kenya

There are at least 16 agro-industrial parks that have been identified through a process of continuous consultation across Kenya. The plan is going to inject estimated 8,000 hectares of industrial real estate and over 800,000 hectares in out-grower farm schemes.

The National Program Model for Agro-Industrial Park Establishment

Until today, Kenya has not started to put up the agro-industrial park facilities, like in many countries. Even the Philippines has not put one, and not even considering even in its ambitions Build-Build-Build program. In fact, the Food Terminal Market operations is being stopped as the area it is located inside Metro Manila is better for high-end property development. The initiative in the Philippines started in 2009 at the time India was just building its first food park.  The Fiji national agricultural policy prepared in 2014 also proposed the food park.

We wish to discuss the models that we are considering for Kenya based on the Indian experience as well as what we are also advocating for the Philippines and for Kenya.

The Special Purpose Vehicle Model Adopted by the Ministry of Food Processing and Industries of India

India’s mega food park development is worthy of emulation as it developed at a fast pace. Within just 7 years after the Srini Food Park was just inaugurated on July 9, 2012, the total mega food park in the country is already 18. Including the operational food parks, 37 mega food parks have been considered funded out of the 40 planned by the country. In fact,

“The Mega Food Park project is implemented by a Special Purpose Vehicle (SPV) which is a Body Corporate registered under the Companies Act. State Government, State Government entities and Cooperatives are not required to form a separate SPV for implementation of the Mega Food Park project. Subject to fulfillment of the conditions of the Scheme Guidelines, the funds are released to the SPVs. Proposals for seeking assistance under the scheme are invited through Expression of Interest from time to time” https://mofpi.nic.in/Schemes/mega-food-parks

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