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Private investment creates jobs and improves nutrition in East Africa

Published on November 28, 2018

More families across Kenya are enjoying great-tasting, nutritious dairy products thanks to the increased level of investment going into the dairy sector. Bio Foods Products Ltd (Bio Foods) is a Kenyan agribusiness that works with dozens of local farmers to produce high-quality dairy products for East African retail and hospitality customers. Its products, once only available in Nairobi and Mombasa, Kenya, are now in over 800 stores and outlets across Kenya and in Tanzania, Uganda and Rwanda. The product line has diversified to include new kinds of yogurt, milk and complementary products, like honey and jam. The company’s staff has jumped from 143 employees in 2016 to 249 in 2018. These changes and more were made possible by additional private capital the company received that transformed the business into a technology-driven dairy processor.

Bio Foods represents one of 38 transactions the USAID East Africa Trade and Investment Hub has supported over the last four years. In response to a request by one of the company’s investors, the Hub conducted in-depth research on East Africa’s dairy processing sector and analyzed Bio Foods’ operations to create a product and consumer growth strategy. This information built the investors’ confidence in the investment, leading to the close of the transaction.

The new strategy informed Bio Foods’ acquisition of new production equipment, allowing it to expand throughout the region. To service the increased demand, the company supported dairy farmers to scale their operations. This included paying above-market prices and offering loans so that farmers could invest in milking machines, storage tanks, cooling systems and other equipment. Greater dairy production provides needed jobs and enhances consumers’ nutrition, contributing to a healthier and more self-sufficient population.

“I invest in my farm with confidence knowing that Bio Foods has the capacity to absorb the increased milk production. I am excited to continue to grow my farm, earn more money and employ more people,” said Nelson Nyamu of Kalia Farm in Tala, Kenya, who supplies Bio Foods with milk.

In the past four years, the USAID Hub has helped close $143.2 million of investment transactions, enabling firms to create 1,522 new jobs, including employment for 1,131 women and youth. In addition to new employment, these transactions support greater access to finance, food security, stronger value chains and intra-regional trade, contributing to the region’s economic development.

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