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Good times for pyrethrum farmers as State to issue 60m seedlings

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Farmers harvest pyrethrum flowers in Molo, Nakuru. FILE PHOTO | NMG 

In efforts to revive the pyrethrum industry, the government plans to distribute 60 million seedlings to farmers in 19 counties starting next year.

This is after the government established market in United States and Asia.

The Cabinet Secretary for Agriculture Mwangi Kiunjuri said over four investors have approached the ministry seeking to buy dried pyrethrum flowers.

“We are not ready to let such an opportunity fade away and it is in this regard that we have decided to provide farmers with certified and subsidised seedlings by the start of the longs rains next year,” he told the Sunday Nation.

For a farmer to put an acre under pyrethrum, he said, one requires more than Sh40 million to buy seedlings. This is prohibitive and many cannot afford, said the CS, adding that it is because of this reason that they have decided to distribute the certified and subsidised seedlings.

The CS said buyers are willing to purchase a kilogram of dried pyrethrum flowers from Sh200-Sh250 but Kenya is pushing for more.

Among the 19 counties that the ministry has already tested their soils and found them fit for growing of the crop are Nakuru, Kiambu, Nyandarua, Nyeri, Laikipia, Meru, Embu, Baringo, Elgeyo Marakwet, West Pokot, Trans Nzoia, Bungoma (Mt Elgon), Uasin Gishu, Nandi, Kericho, Bomet, Narok, Nyamira and Kisii.

In the next one year and in collaboration with the county governments, he said they want to make sure 15,000-20,000 acres are under pyrethrum.

“I am encouraging women and youth to join groups and acquire clonal splits from the ministry and grow them to earn a living and help in seeds multiplication,” he stated.

Kenya has the potential to produce and process 20,000 metric tonnes (MT) of pyrethrum flowers to earn Sh7.5 billion for farmers per year and Sh5.8 billion in foreign exchange from refined extract alone.

With direct or indirect linkage to the crop that best grows at an altitude of 1,700 to 2,900 metres above sea level, it can provide a livelihood to three million people.

In the 90s, Kenya was controlling over 90 percent of the world market compared to the current share of only 2 percent.

Over time, production declined and Kenya lost the market to Australia which took over with the island state of Tasmania later taking over the growing and processing in early 2000.

By 2010, Tasmania controlled 65 percent of the world’s pyrethrum production. Other countries producing the crop are China, Rwanda and Tanzania, which now control world market.

Production of pyrethrum in the country declined from a high of 18,000 metric tonnes in 1992 to the current national production of about 500 metric tonnes.

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The current acreage under the crop is about 3,000 acres and the number of growers has also drastically reduced to 8,000 from 40,000.

In 1990s, pyrethrum was a major foreign earner that brought in over Sh2.1 billion at its peak in 1996 compared to current Sh120 million. The crop also saw over 200,000 small-scale growers benefit directly in 1980s-1990s.

According to a pyrethrum report from the Ministry of Agriculture, the crop started declining in 2004-2005.

The main reason for the drop was inconsistent payment to growers, unmatched market demand and production and unfavourable industry legal framework.

Pyrethrum is a crop that has been grown in Kenya since 1928 and produces pyrethrins used as natural insecticides and pesticide for agricultural, pharmaceutical and domestic use.

However, Mr Kiunjuri said they have conducted several reforms in the sector which will now see the industry bounce back to its lost glory.

After enactment of the Crops Act 2013, and in line with the agriculture sector reforms, he said the industry was reorganised through separation of the regulatory and commercial functions of the former Pyrethrum Board of Kenya (PBK).

In the arrangement, he went on, the regulatory functions have been ceded to the Agriculture and Food Authority (AFA) through the miraa, pyrethrum and other industrial crops directorate whose functions are to develop and promote the Kenya pyrethrum industry.

Mr Kiunjuri noted that commercial and processing functions are being played by Pyrethrum Processing Company of Kenya.

The role of the company is collection, payment and processing of growers’ dry flowers, marketing pyrethrum and pyrethrum products and provision of technical and scientific services relating to the crop.

Currently, the PBK processing plant in Nakuru operates at 10 percent of its capacity due to lack of flowers. Nevertheless, the company has one of the leading refining plants globally and is able to produce high quality extracts that are preferred by the market.

However, the Agriculture minister affirmed the industry is currently recovering and has attracted four processing companies in the country.

He stated, “Currently, six new companies have applied for licensing as processor and are at various stages of licensing.”

They include Pyrethrum Processing Company of Kenya (capacity of 25MT per day operating at 50MT per day. This firm is, however, yet to be commissioned.



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Market Turnover Rises to KSh 553.5 Million

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Market turnover at the Nairobi Securities Exchange today increased by 266% to KSh 553.5 million in comparison to Friday’s turnover of KSh 151.1 million. A total of 22.3 million shares were traded in 1,238 deals.

Top mover of the day was Safaricom with 9.15 million shares traded in 218 deals valued at KSh 266.34 million. Safaricom was trading between Ksh. 28.90 and Ksh. 30.20 closing 1.85% lower than Friday at Ksh. 29.10

Kenya Re-Insurance saw 4.37 million shares traded, valued at KSh 9.61 million. Kenya Re-Insurance closed at KSh 2.20. Equity Group moved 4.08 million shares closing the day at KSh 32.90. KCB Group moved 1.67 million shares valued at KSh 57.88 million. KCB stock closed the day with a 1.14% share price depreciation closing at KSh 34.65.

KPLC saw a turnover of KSh 1.4 million in 50 deals. KPLC closed the day with a 3.13% share price appreciation closing at KSh 1.98. Energy sector counterpart Kengen moved 143,000 shares each valued at KSh 5.38. Total Kenya saw an end of day share price appreciation of 6.6% to close at KSh 25.05.

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Top gainers of the day were Liberty Kenya(8.21%), Trans-Century(8.11%), Flame Tree Group(7.91%), Total Kenya(6.60%), and WPP ScanGroup(5.42%). Trans-Century moved shares worth KSh 283,524 while Flame Tree made a turnover of KSh 92,842. WPP ScanGroup moved shares worth KSh 1.06 million in 19 deals.

Top loser of the day was TPS Eastern Africa with an end of day share price depreciation of 9.62%. Other losers of the day were BOC Kenya(6.09%), Centum Investment(3.78%), East African Breweries(3.23%) and Standard Group(2.48%). Centum Investment moved shares worth KSh 6.45 million in 30 deals closing at KSh 24.15. EABL moved shares worth KSh 67.21 million, closing at KSh 157 per share.

The NSE All-share index declined 1.58 points to close at 137.99. The NSE 20 gained 3.16 points to close at 1949.12 while the NSE 25 shed off 25.96 points to close at 3193.30

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Kisumu seeks funds to employ, promote 2,383 county staff

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Kisumu seeks funds to employ, promote 2,383 county staff

Kisumu County is seeking additional funds for promotion and recruitment of 2,383 critical workers.
Kisumu Governor Anyang’ Nyong’o. Kisumu County is seeking additional funds for promotion and recruitment of 2,383 critical workers. FILE PHOTO | NMG 

Kisumu County is seeking additional funds for promotion and recruitment of 2,383 critical workers.

The County Public Service Board raised concerns over a huge backlog in staff promotions and recruitment for effective service delivery.

According to a gazette notice published last Friday, only 113 doctors out of 1,326 workers who qualified for promotions in 2019 have been promoted.

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“The remaining promotions will be effected subject to availability of funds and suitability interviews where applicable,” said part of gazette notice number 4544.

The 2019 annual report to the county assembly notes that insufficient funds have stalled career progression and talent management in the 11 departments in the devolved unit.

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The board chaired by Babu Karan plans to petition the county executive and the assembly to allocate adequate funds to bridge the gap as a way of promoting a harmonious working relationship.

The failure to effect promotion has caused hostility between the county and health workers who have downed their tools over the issue.

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Troubled KQ set to exit securities exchange as govt takeover looms

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JAMES ANYANZWA

By JAMES ANYANZWA
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Troubled Kenyan national carrier, Kenya Airways, has been suspended from trading on the Nairobi Securities Exchange (NSE).

The suspension sets the stage for the loss-making carrier’s exit from the bourse and completion of planned management takeover and eventual buy-out of minority shareholders by the government following publication of the National Management Aviation Bill 2020 late last month.

“Consequently, the company has applied for suspension of trading in its shares and closure of its register until the resolution of its future is determined,” said a statement released by the NSE, Friday.

“The suspension from trading takes effect from July 3, 2020 and will remain in force for a period of three calendar months.”

The carrier is grappling with a negative working capital of Ksh42.15 billion ($400 million). Its net loss for the year 2019 widened to Ksh12.97 billion ($129.7 million) from Ksh7.58 billion ($75.8 million) in 2018.

In May last year the NSE management reinstated the airline as a constituent counter of the NSE 20 Share Index, three years after it was dropped from the list due to financial troubles.

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Close to 80,000 small investors whose shareholding was significantly diluted during the initial restructuring plan that saw the government increase its shareholding in KQ to 48.9 per cent from 28.9 per cent in 2017 will have to await a buyout offer from the state.

Company statements show retail investors, excluding the large institutional and individual shareholders who owned 24 per cent of the airline, saw their shareholding diluted to a low of 2.8 per cent after the restructuring.

On the other hand, the 10 banks that own 38.1 per cent of the airline through a special purpose vehicle — KQ Lenders Company — after converting their $165 million debt into equity, are well cushioned after it emerged that the National Treasury guaranteed the value of their shares in case they fell below the amount owed to them by the airline.

“The small investors are going to receive the biggest hit in this compulsory takeover by the government because their shareholding has been significantly diluted. On the other hand, the Treasury and the banks agreed that the government provides a guarantee on the value of their shares so that they don’t fall below the debt they are owed by KQ,” said James Kariuki, an aviation expert and chairman of the China-Dubai Traders Association.

“Banks were forced to take up these shares because the airline did not have money to pay them and that is why this guarantee on the value of their shares was given,” added Mr Kariuki.

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KQ’s 2017 financial restructuring resulted in the government controlling 48.9 per cent shareholding while a group of 10 local banks got 38.1 per cent of the shares.

Other shareholders of the national carrier are KLM Royal Dutch Airline (7.8 per cent), employees (2.4 per cent) and other small investors at 2.8 per cent.

The persistent underperformance of the airline that has led to huge losses and loss of market share to rival firms has compelled the government to initiate the process of its nationalisation, with hopes of turning around its dwindling fortunes.

“The takeover follows many years of mismanagement. In a way it is going to help resuscitate the company that is in danger of collapse but it points to a bad culture where people who have ruined and brought down state corporations are left to go free,” said Emmanuel Manyasa, an economist and executive director of Usawa Agenda, a non-governmental organisation.

“The government takeover is a reprieve for KQ for the time being but we don’t know the viability and sustainability of this turnaround plan by the government,” added Dr Manyasa.

On Thursday (July 2) the KQ stock on the NSE rose by 6.39 per cent to Ksh3.83 ($0.03) per share, with analysts attributing the share appreciation to expectations that the government could buy out minority shareholders at a premium.

KQ is technically insolvent, meaning that if it is to be wound up, the equity investors would not get anything. The government will have to inject new capital to turn around the carrier.

Kenya’s parliament approved the nationalisation of the loss-making airline as a way of saving it from bankruptcy.

Under the plan, the government will also create a special purpose vehicle — Aviation Holding Company (AHC) — to manage Kenya’s aviation sector.

The AHC will have four subsidiaries — Kenya Airways, Kenya Airports Authority (KAA), Jomo Kenyatta International Airport (JKIA) and a centralised Aviation Services College — which will be run independently.

“The government has never been good at business and this is demonstrated by the lack of going concern for a number of state-owned enterprises. Kenya Airways is not a national strategic asset, there is no evidence that nationalising it, a move that will mean taxpayers assuming its debts, will improve the company’s financial position,” Callstreet investor relations director, George Bodo, told The EastAfrican in an earlier interview.

The airline is facing a financial crisis that has seen it halt route expansion and embark on a review of the existing ones with a view to abandoning and reducing frequencies on what it considers to be non-profitable flights.

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