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Nov 21, 2018

Gluten free flours, a healthier alternative

Dash Crop Limited is a limited liability company that works with smallholder farmers in cassava, finger millet, amaranth, pulses and sorghum value chains across Homabay, Migori, Busia, Kisumu and Siaya counties. The company’s mission is to support sustainable agribusiness among farmers in the region of Western Kenya.

Incorporating innovative business models in the flour sector

The company employs a contract farming model. Contracting out production is a commercial decision to facilitate an adequate supply within a designated period and at an economic price. Sorghum and cassava are the main crops used in production of its range of flours. The company is currently working with over 11,000 farmers in its sorghum and cassava value chains. 

The sorghum model is a tri-partite model between the Kenya Commercial Bank (KCB), who provides input loans to farmers, and Dash Crop Limited, who acts as a provider of inputs in the production process and the off-taker of produce and the smallholder farmers. This model has enabled previously unbanked farmers to plug into the banking space and has enabled them to access other personal loans from KCB.

“We have achieved a number of milestones. From increasing our reach to five counties from one in 2015, working with over 11,000 farmers in the sorghum, millet, amaranth and cassava value chains, introducing our range of flours to acquiring land in Rongo for a flour processing facility,”  said Caroline Alang’o, Managing Director.

New market opportunities for flour MSMEs 

The flour sector MSMEs have in the recent past gained popularity with the public consumer, with a higher concentration of flour producing MSMEs located in Peri-Urban low income estates and rural areas. Large producers are mainly located in industrial areas and produce non-differentiated flours. However, Dash Crop targets consumers in peri-urban and rural areas with its range of flour that includes Composite Ugali Flour, Composite Uji Flour, Fermented Uji Flour and Pure Cassava Flour. With increased production capacity in the medium-term, the company will also target urban consumers who drive demand for gluten free and Slowly Digestible Starch products. These consumers are health-conscious and less price sensitive compared to the rural and peri-urban customers.

The opportunities for the company to tap into are driven by industry surveys, which indicate that the Kenyan wheat flour market is expected to reach hit $1.15 billion by 2020. The commercial maize flour market, on the other hand, is expected to reach $444 million by 2020. Production of maize and wheat has been dwindling in the last few years as a result of diminishing rainfall. This creates immense opportunities for small scale millers, especially those doing substitution of wheat and maize with drought tolerant alternatives.

The company is looking into automating its production in order to increase its production capacity. The startup was admitted into the Kenya Climate Innovation Center’s incubation programme mid this year.

 

By Ann Kitonga

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