Picking up the pace in Kenya

“I remember when I started this farm. It was hard and tough, and I didn’t always think it would work out. But we will have a good future if we take care of our land. It gives us life. With the help of others we can now sell our fruits around the world. To countries we have never even visited.” – Joseph Githii, avocado farmer

Joseph Githii walks slowly, taking his time as he gives a grand tour of his farm. Located just outside the small town of Kanjuku, 70 km from Nairobi, the 2.8-hectare property – which Joseph modestly calls his garden – is an intricate system that rotates crops to provide maximum space for the most in-demand produce.

He stops at an avocado tree. This tree will continue to grow fruit throughout the season, with the total yield reaching as many as 5,000 avocados. What began 20 years ago as a hobby and two trees has now turned into more than ten trees and a steady stream of income.


Kenya’s traditional and contemporary exports – tea, coffee, flowers and textiles – have been the country’s economic mainstay for years. In recent years the avocado has also emerged as a growing export commodity, much to the benefit of the country and its farmers. Local entrepreneurship and Maersk Line’s reefer container technology have been important in Kenya’s impressive development.

Reefer containers

Reefer containers are refrigerated containers that control the temperature, ventilation and humidity of cargo. They are specially designed to carry fresh goods over long distances without them going bad.
Find out more about Maersk Lines reefer technology.

A rising continent

In the last decades of the 20th Century, Africa underwent a period of negative development, facing declining production and purchasing power. Its fortunes have since changed for the better, and the notion that Africa is on the brink of long-term, sustainable growth has moved from being far-fetched to quite conceivable.


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Maersk_China_GDP

Gathering momentum

  • GDP was estimated at $32.2 billion in 2010 (WB)
  • Per capita GDP was $795 in 2010, EACs highest (WB)
  • Kenya supplies nearly half of all EAC exports (GTIS)
  • World Bank ranks Kenya 109th out of 183 economies for ease of doing business (WB)
Source: World Bank, Global Trade Information Services

Widely recognised as East Africa’s economic powerhouse, Kenya’s growth expectations are high.

Kenya also houses East Africa’s busiest container terminal, the port of Mombasa – the origin of a transport corridor that leads through Kenya to Uganda, Rwanda and the new state of South Sudan, linking some 200 million people to the global markets.

According to the World Bank (WB), the key to sustaining the country’s new commercial vitality is boosting exports to finance infrastructure investments. In Nairobi, Maersk Line’s Managing Director for East Africa, Steve Felder, nods his head in agreement, ”We have all the right ingredients for growth. The key is to invest in infrastructure and technology ahead of the curve instead of catching up.”

One Kenyan exporter contributing to the economy is New Wide Garments Kenya, a Maersk Line customer that imports textiles from China and exports garments to the US. Depending on the season, New Wide Garments imports up to 120 containers of textiles and exports 90 containers of garments each month. With over 6,500 employees and booming trade, the company reflects a country on the rise.

Removing the barriers

Transit times have always posed problems for exporters, and for agricultural farmers in particular.

The effectiveness of trade flows along the Northern Corridor is influenced by many things; road infrastructure, rail infrastructure, and border crossing facilities. A total 45% of Mombasa’s throughput moves on to neighbouring countries, with the majority of the remaining 55% destined for Nairobi, primarily by truck, on the heavily congested and often gridlocked 500-km long Mombasa-Nairobi road. To help increase trade efficiency, the amount transported by rail, currently 3%, must rise.

APM Terminals is determined to be part of the solution. Their state-of-the-art container freight station, Great Lakes, aims to relieve pressure on the port of Mombasa and ensure a healthy flow of traffic from the terminal. The idea is to move cargo from the port to be processed at the facility, and then move containers into the country by rail, reducing road freight.

 “We see ourselves providing a value product that will see us growing rail as the primary mode of transit cargo, taking cargo away from the road and improving efficiency of the flow along the entire corridor,” says Jesper Harring Boll, Cluster Director for Southern Eastern Africa at APM Terminals.


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Sustainable prosperity

The World Bank is urging governments to invest in poverty reduction strategies that focus on:

  • Creating jobs.
  • Enhancing the productivity of smallholder farms.
  • Strengthening cash transfer programs.
  • Targeting public spending to improve education, water, sanitation and access to electricity.
  • Empowering the women who currently constitute half of the Kenyan population.
Source: World Bank

Despite the recent boom in exports, the Kenyan economy is still operating below its potential, and remains vulnerable to external shocks that threaten to undermine its prospects for growth and poverty reduction.

Diarietou Gaye, the World Bank  Country Director for Kenya explains: 

“The government needs to create an enabling environment by continuing to invest in infrastructure, increasing domestic energy production, removing bottlenecks to doing business and sustaining sound monetary and fiscal policies.” (Source: worldbank.org, Time for Kenya to Shift Gears to Accelerate Growth and Reduce Poverty, June 17, 2013)

Nevertheless, East Africa is ripe for investment.

A trust business

For Kenya’s avocado exporters, the introduction of Maersk Line’s Star Care initiative four years ago made a fundamental change. Before that, the Middle East had been the end of the line. Now, Europe, where the fruit sells for roughly triple the price, is within reach.

Exporters were initially encouraged to participate on a ‘no cure, no pay’ basis, with the promise that if their fruit went bad, no one would pay a cent. A container was shipped to Belgium and the buyers liked what they saw, purchasing the fruit at premium rates. The success of this shipment convinced both farmers and exporters of the opportunities.

“We make a promise and we make it work. Confidence is built when their buyers are happy with the product. But it takes time and dedication, and from the time the reefer is filled until it arrives at the destination, it is my baby,” explains Beth Wanjiku Ihomba, Sales Executive, Maersk Line.

Before the Star Care container was introduced, the entire East African avocado market amounted to a few hundred containers per season. Now the region produces about 115,000 metric tonnes of avocado, a weight equal to approximately 21,000 adult elephants, with a huge impact on the Kenyan economy and also the smallhold farmers.

Small fruit. Big impact

“Many avocado farmers have traditional set ups with as few as two or three trees. The money they make, and they are paid every day, makes a real difference to them. It puts food on the table. It sends their children to school,” says Beth Wanjiku Ihomba, Sales Executive, Maersk Line.

Thanks to a longer growing season, Kenyan farmers enjoy very good opportunities to access the overseas markets when the supply/demand balance is advantageous. So much so, that their export volumes are second only to South Africa.

The majority of fruit comes from small-scale farmers like Joseph Githii. And within the next ten years, new avocado fields are expected to more than double Kenya’s current production of avocados, with small-scale farmers being the main drivers and beneficiaries.

The world market has opened up to us thanks to Maersk Line’s reefer containers...
Peter Nderu, Partner, Keitt Exporters Kenya Ltd.

"Ten days used to be the limit. Now we can carry fruit for 25 days to Europe, and even 40 days to Russia. Without the reefer containers we would be doing something else,” says Peter Nderu, Partner, Keitt Exporters Kenya Ltd.


Passing on the prosperity

In Kanjuku, Joseph Githii also has the next generation in mind: 

“One of my daughters saw what I was doing, and she took two seedlings. She planted them, and now she makes money. Her three daughters are in secondary school now,” he says. 

He examines the quality of the avocado in his hand. In a few weeks it might be on the shelf of a greengrocer in the Netherlands.

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