Twige-commerce distribution platform, today announced the launch of its new subsidiary Twiga Fresh, through which it will engage in agriculture and distribute its own agricultural products to traders.
Twiga said it had started producing horticultural products, such as onions, tomatoes and watermelons, on its 650-hectare land (1,606 acres) with an estimated production of 150,000 tonnes of fresh produce a year. Twiga has so far invested $ 10 million in a new venture that will be backed by debt from financial development institutions.
Since its launch, Twiga has used technology to connect small farmers with informal traders, giving producers access to new markets and more customers, while optimizing food supply chains in their markets. However, along the way, Twiga says they have had to deal with tracking problems, depletion of inventories and price volatility – making it difficult for the company to keep its promises of affordability and food security. With Twiga Fresh they predict better control over production.
“Volumes for other fresh produce were low because we decided not to scale fresh produce if we didn’t have food safety tracking,” said Twiga’s CEO and co-founder. Peter Nyonjo in an email, adding that the new business will not affect as many farmers.
However, Twiga said it would continue to supply some products, such as bananas, in which value chains are more “tuned and efficient” – to partner farmers.
The company says its farm is one of the largest commercial enterprises for the production of fresh products focused on the domestic market, as most large horticultural enterprises in the East African country export their crops.
“Much of Africa’s investment in modern commercial agriculture over the years has been made in export-oriented industries due to the low formality of the domestic food market. This has led to a decline in the productivity of local agriculture, which has affected both quality and market prices, ”said Njonjo, who co-founded the company with the former CEO. Grant Brooke.
“Today, prices for basic fresh food are among the highest in history, and we are also seeing an increase in imports of basic foodstuffs in this regard. By building a B2B supply chain into informal retail, Twiga has been able to shape the domestic food market using technology, putting the company in a unique position to invest in backward integration and solve the problem of declining productivity and increasing food costs, ”he said. said.
Apart from Kenya, Twiga is looking to start operations in Uganda and Tanzania, and plans to explore new markets in Central and West Africa.