The World Bank’s investment arm International Finance Corporation (IFC) has approved an $11.8 million loan to a flower farm in Kenya, underlining the return of agriculture as a key investment option.
Subati Group, owned by two families — Chandaria and Patel — is undertaking a $19.5 million expansion project of its rose flower business, which will see it set up a 15-hectare rose farm and scale up fresh herb farming.
“IFC is considering a loan of up to 11.8 million to partly finance the investment plan of Subati Group, which hopes to expand and diversify its rose exports,” reads a report by IFC.
Formed in 2007, the company exports 55 million flower stems from its three farms in Kenya directly to Europe, bypassing the auction market.
The company plans to scale up its fresh herb farm to 40 hectares, with a cold storage facility, water treatment plant and solar panels. Subati’s payroll of 2,038 staff is expected to increase by an estimated 700 with the expansion.
The company has 459 hectares of land in Subukia and Naivasha in the Rift Valley and Kibwezi in eastern Kenya, of which 99 hectares are under greenhouses.
The expansion by Subati comes at a time when Kenya is planning direct flights to the US, a move expected to spur the demand for Kenyan horticultural products in the world’s largest market.
Ethiopian flower farms have been giving Kenyan farmers a run for their money in what has been attributed to the direct flights between Ethiopia and New York.
Subati Group joins investment firm Centum which has also announced plans to expand its agriculture business.
Centum recently acquired 14,000 acres of land in Masindi, western Uganda as it eyes large scale grain production. The investment in Uganda followed an acquisition of 120 acres in Ol Kalou in Kenya’s Rift Valley for similar purposes.