The partnership, first announced in August last year, involves open-ended, Nutreco-managed joint ventures with two indirect subsidies of Unga Group: Unga Farm Care (EA) limited in Kenya, and Unga Millers (U) Limited in Uganda.
Unga has over 100 years of grain-processing experience in East Africa and, as one of Kenya’s oldest companies, has become the largest animal feed miller in East Africa.
Both ventures are named Tunga Nutrition.
When asked how much Nutreco is investing in the two initiatives, Pieter Bastiaanssen, managing director Middle East and Africa at Nutreco, said: "This is a 50/50 joint venture between the two companies in Kenya and Uganda, with Nutreco taking on management. While we won’t disclose specific investment figures, the joint venture will make significant investments in production capacity in both Kenya and Uganda to meet anticipated future market demand."
The company outlined how population in East Africa is expected to double from 170 million to 340 million by 2050, and, with it, demand for animal protein.
Tunga Nutrition Kenya will increase production capacity at its jointly owned fish feed plant in Nairobi to commercialise products under Skretting and Fugo brands.
The plant, which is primarily focused on tilapia feed production, is already operational, said the Nutreco representative, and it has a capacity of around 10,000mt per year. "We plan to make additional investments to more than double this production capacity by 2023."
Tunga Nutrition Uganda will make use of Unga Millers’ dormant flour mill in Kampala, converting this into a feed mill producing animal feeds and concentrates. Its products will be sold under both Trouw Nutrition’s Hendrix and Unga’s Fugo Brands.
"The project will start immediately, and we expect its completion and the first production runs by mid-2023," continued Bastiaanssen.
As for the branding choices, the idea is to leverage pre-existing market positions, he said.
"Nutreco has a solid market position in concentrates with its Trouw Nutrition brand (Hendrix) and in fish feed with its Skretting brand, while Unga’s Fugo brand is very strong in complete feed in the region. Since all these brands focus on specific segments in the market, they will fit perfectly together in the JV."
Tunga Nutrition will have new senior management teams in Kenya and Uganda, bringing together the expertise of both Nutreco and Unga. In Kenya, Harrison Juma will take on the role of general manager, while Jennifer Wangari Githuku joins the team as finance manager.
In the first phase of hires in Uganda, Pieter Bastiaanssen will take on the role of general manager AI, and TC Chido, who is current controller of Skretting Nigeria, will be appointed project manager, said Nutreco.
Nutreco entered Africa in 2001 by acquiring a share of the Egyptian company Hendrix Misr, which came under full ownership in 2013 and was renamed Skretting Egypt. Nutreco increased its presence in 2014 through a fish feed joint venture in Nigeria, and, in 2016, it also started a fish feed joint venture in Zambia.