Sasini, one of the leading tea and coffee producers in the East Africa aims to start the pilot project of 250 heifers in June which will run for four years.
“We expect to have a significant bottom line change. First because we will be making available 1,000 heifers every year and that will be momentous revenue to [Sasini]. This pilot will bring in more than 100 Kenyan million shillings to our bottom line,” Moses Kiplagat, managing director at Sasini told CNBC Africa.
The company is involved in growing, processing and commercial milling of tea and coffee, as well as operations in horticulture dairy farming and forestry. Depressed international prices in tea, Kenya’s top foreign exchange earner, have hurt Sasini’s bottom line, prompting a profit warning.
Last week, Sasini said full year profits would be reduced by more than 25 per cent after its first half pretax profit slumped 86 per cent as a result of falling tea prices and a decline in coffee output. This has necessitated revenue diversification into livestock.
“Sasini is launching an aggressive innovative livestock program. We will be doing the launch in June. Through this initiative we want to build the first ‘cow hotel’ in Kenya, where people can invest on a high value dairy animal that Sasini will be managing for them,” Kiplagat said.
The listing plans are subject to regulatory approval by the Capital Markets Authority.
“We [Sasini] will have it [livestock revenues] at the stock market as an alternative stock which is currently not available to Kenyans. There is a window for that in the NSE. The Sasini share will still remain, we will still draw from its interest in the livestock,” Kiplagat explained.
The listed firm is looking to venture into other activities with discussions ongoing in real estate, one of the fastest growing assets classes in the East African nation.
“We were worried about depressed prices and projected the possibility that will almost remain on course and marginally different from last year’s. We find it better to inform our shareholders there is a sign that profits may not be as good as was the case last year and more so we expect a more depressed condition,” Kiplagat explained.
In the last few years, tea and coffee prices have been spiraling down, showing uncertainty over the future of the two commodities that contribute highly to the country’s GDP.