Thursday, February 6, 2014

Global Ingredient Manufacturer Ingredion plans re-entry into the Kenyan market

Global Ingredient Manufacturer Ingredion plans to re-introduce full operations in the Kenyan market once it’s sure getting raw materials locally. The company which relies more on corn to produce some of its products closed down its factory in Eldoret in 2002 because of maize deficiency in the country. According to Ingredion Senior Director Strategy & Business Development, Europe, Middle East and Africa (EMEA) Mike Croghan, the company is working with various industry stakeholders to improve and stabilize market conditions. However, he was non-committal on when the company would reset up a new factory in Kenya.

The Ingredion group of companies specialises in nature-based sweeteners, starches and nutritional ingredients. With operations in more than 40 countries, the company serves approximately 60 diverse sectors in food, beverage, brewing, pharmaceuticals and other industries.

Currently, the company is relying on imports of products from other markets to meet the demands of the local market. The firm is also focusing on deploying products in line with the changing consumer needs and challenging economic times as consumption in emerging markets like kenya is largely driven by affordability. 

“We closed down the Eldoret factory because the market conditions couldn’t allow us to operate optimally as Kenya is a maize deficiency company. With the business model we have adopted now, we work with our customers to develop some of these products then we ship then in from our factories in other markets. If market conditions allow, we will definitely review and business strategy going forward,”he said.

Speaking during a customer event at a Nairobi Hotel to celebrate one year of Ingredion in Kenya, Croghan said the company was keen to expand its product portfolio not only in East Africa region but also the West African market.

He noted that the positive macro-economic indicators, young population, growing middle class and increasing urbanisation make Kenya an attractive investment destination as it presents opportunities for the food and beverage sectors as consumers look out for convenient and quality products that fit into the demands of their lifestyle.

“As the needs of consumers grow and evolve so will the variety of ingredients that we provide. Whether new modified starches; sweetener solutions; ingredient blends or new solutions for the health & nutrition market, we will bring new products into our portfolio by building onto our existing facilities, acquiring new technologies or businesses, or gaining access to new opportunities’

Some of the products the company seeks to introduce into the region, will help manufacturers improve their cost efficiency without sacrificing eating quality and visual appeal. According to Mr. Croghan, “Cost savings can be achieved by using functional starches to replace everyday ingredients. This seems to be of particular relevance in emerging markets such as Kenya, where costs are a top priority for manufacturers and consumers alike.

Mr Croghan added that, Ingredion’s global presence and resources are complemented by a local subsidiary based here in Nairobi, who can monitor and anticipate the major trends in the region. 

He indicated that Ingredion will continue to provide technical expertise and work in close collaboration with customers on recipe development to meet demand for satisfying textures and tastes. Working in partnership with Ingredion helps manufacturers to develop innovative, consumer-winning products, with the added value that is needed to stand out.

“In today’s challenging economic times, it also remains important that food and beverages deliver good value for money, meeting customers’ high expectations for quality products that remain affordable. But again, if achieved harmonization of taxes across the East African region will be a big boost to the manufacturing sector,” he said.

Today Ingredion serves customers within the EAC, namely, Uganda, Tanzania, Rwanda and Burundi and is also targeting to expand its business presence in West Africa using the Kenyan office as its business hub. 

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