Unga Group readies for shift to food company

Sunday December 11 2022
unga (1)

Workers load flour on to a truck for dispatch at Unga Limited plant in Eldoret. FILE PHOTO | NMG


Listed regional flour miller Unga Group Holdings Ltd says it is working on a transition plan into a general food company to secure the future of the business.

“Looking ahead, we have observed changing consumer purchasing habits, particularly among younger consumers who prefer convenient, nutritious foods that are easy to prepare while also being health conscious,” said group managing director Joseph Choge in the firm's latest integrated report.

The the miller listed on the Nairobi Securities Exchange announced that a new product development team has been assembled to manage the transition.

According to the report, wheat and maize prices increased during the financial year ended June 30 as a result of poor harvest, a weakened local currency and adverse fiscal measures imposed by some of the exporting countries.

In addition, depreciation of the shilling against the dollar impacted importation costs, leading to substantial forex losses.

According to the report, more than 50 new millers have joined the sector over the past two years, resulting in an intensely competitive environment.


“We continue to be affected by cheap poultry imports from the region and fish from Asia, resulting in condensed market for our animal nutrition products,” the report says.

Economy recovered

Last year, Kenya’s economy recovered from the crippling effects of the pandemic to expand by 7.5 percent, compared with a contraction of 0.3 percent in 2020. The recovery was mainly driven by resumption of most economic activities after the lifting of the containment measures instituted in 2020 to curb the spread of the virus.

But unfavourable weather conditions continued to constrain the growth of the agriculture sector, with production of maize declining by 12.8 percent to 36.7 million bags in 2021, from 42.1 million bags in 2020.

Wheat production declined by 39.4 percent to 245,300 tonnes in 2021, from 405,000 tonnes in 2020, consequently increasing the amount of wheat imported by 6,400 tonnes to 1.89 million tonnes in 2021.

Last year, Unga entered into an agreement to sell its bread-making business to a logistics firm BigCold Kenya after branding the bakery business “unsustainable”.

* Story edited to fix inaccuracies.