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KCV invests in gum production in northern Kenya

  • By Christiane Lemma
  • July 22, 2021

Kenya Climate Ventures, KCV, an impact investment management company that seeks to accelerate access to climate smart solutions by providing tailored and targeted financial, technical assistance and business development support, KCV has invested in Hornafrik Gums Limited through a debt facility, a company involved in collection and aggregation of gums and resins in Northern Kenya. KCV investment is  a means to support pastoralists in the northern parts of Kenya to boost  their livelihoods. 

Hornafrik Gums Limited, the gum producing giant in the area, is set to acquire a motor vehicle to boost their collection from different parts of Marsabit and Wajir counties. Previously, the company organized pastoralists mainly women and youth, in these counties around aggregation/collection points. Those near the business warehouse would deliver sporadically, which resulted in delays. Through KCV’s investment Hornafrik Gums will help in sustaining forest cover as the trees provide sustainable income through gums as opposed to tree felling for firewood and charcoal.

In addition, the investment will provide the gums and resins aggregation company with working capital to enhance and sustain the enterprise’s product aggregation capacity that is highly dependent on good cash flows. This will increase the company’s impact and improve its production.

KCV CEO Victor Ndiege said the investment is an opportunity to transform communities in Northern Kenya. It would see Hornafrik Gum Ltd scale up on its gum processing and position the enterprise in the market with a better business plan. In addition, it will offer women and youth involved in aggregation better profits and eventually contribute to the economic growth of the communities.

“This five-year investment will offer the local communities in Northern Kenya an opportunity to access alternative sources of income from a natural resource whose full potential has not been exploited,” KCV CEO says. “Currently, HornAfrik is working with 35 aggregators, who are women and youth, as KCV, we would like to support the enterprise to increase this number to 50 in the next five years.” 

Aside from financial support, KCV is also providing Hornafrik Gum Limited with technical assistance and business mentorship to penetrate the market with ease and give the local gum and raisins aggregators a reliable market for their products.

“In Northern Kenya, people are not farmers. Apart from livestock, the only gold in the region is gum and resins. The gum business has been around for a long time, it is being done in traditional ways,” says Roble Garad, the CEO of Hornafrik Gum Limited. 

Garad says that Hornafrik is adopting new business models to process gum and resins in Northern Kenya. “Hornafrik is the best company placed to deal with gum processing in the region. We have been around for a while and understand the needs of the people. Our business model is focused on protecting the interests of the area and offer aggregators profit for their hard work. This investment is an outstanding achievement and the birth of a transformation phase in Northern Kenya. 

“I thank the entire KCV team as this support will help  support the growth of our company and transform the lives of people in Northern Kenya,” Garad concludes.

Hornafrik Gums Limited sorts and grades products locally and exports them. The export countries receiving the products include China, Qatar, Saudi Arabia, and the UAE. 

After the set five years, KCV CEO says depending on the growth pattern of the Gum business in Northern Kenya and the company’s financial needs, there is possibility of reinvestment in Hornafrik Gums Limited.

By Christiane Amare Lemma