Tanzania: Kamal Agro Firm Embarks On Cashew Processing Initiative

THE Dar es Salaam-based Kamal Group has designed an empowerment drive that seeks to turn Tanzania into a hub of cashew nut processing.

Through its subsidiary, Kamal Agro Limited, the citybased conglomerate has come up with an ambitious project that will see hundreds of Tanzanians becoming active participants in their country's industrialisation agenda.

"I have researched on this project for about five years now when I came to realise that to contribute immensely to the realisation of President John Magufuli's industrialisation agenda, we need a project that will see Tanzanians creating jobs for Tanzanians by processing Tanzanian products locally," said the Kamal Group chairman, Mr Gagan Gupta.

Titled: 'Developing Tanzania National Entrepreneurship in Cashew Processing Industry', the project is built on a system that is largely employed in India.

"In India, between 70 to 80 per cent of cashew nuts are processed by small scale entrepreneurs. The large scale ones come in when it comes to branding and other value addition aspects before the product is exported.

This is exactly what we want to do here," he said. Within the first five years, the project will see at least 15,000 tonnes of cashew nuts being processed locally by small scale processors but Kamal Group is optimistic that within 10 to 15 years, the projects will see Tanzania processing almost its entire cashew produce.

He said the first five years of the project will define the future of the project, exuding confidence that ultimately, the country will be able to create thousands of jobs and save millions of dollars that it currently loses through exporting raw cashew nuts.

"I am into the steel business so when I see opportunities in other areas, I always think of how to share the benefits with the rest of Tanzania... I take this cashew nut processing project as my own challenge. If the entrepreneurs that will be selected to become part of the project fail, I will have also failed but my goal is never to let them down," he said.

The project is designed in such a way that Kamal will create an atmosphere for industrialisation and entrepreneurship. In partnership with a commercial bank, the company will furnish up to 100 Tanzanian entrepreneurs with all that they need to start cashew nut processing, including land, equipment, water and electricity for conducting the processing.

The entrepreneur will only be required to have 16.92m/- as seed capital to qualify for the project. Mr Gagan said the seed capital is just like school fees that one pays to learn a certain job at the university.

"It's like going to a university to study for a Degree course where you also pay school fees but in this case, apart from learning the cashew processing trade, you also earn profit," he said.

The 16.92m/- will be equal to 20 percent of the 84.6m/- in machinery, land and building costs that each entrepreneur is required to have to set up a small scale processing factory. The remaining 67.68m/-, which is equivalent to 80 per cent of the factory costs, will be financed through a bank loan.

"In return, each of them will be able to make up to 37.8m/- each year in profit from the cashew nut processing business after deducting for all the operation costs," he said.

The amount in profits will go up to over 60m/-per year after completion of payment of the bank loan in a period of three years.

"The processing factory will also become the property of the entrepreneur after three years and this suggests that the project simply seeks to create Tanzanian millionaires," he said.

The country will also be able to save up to 300 million US dollars of what is currently spent by exporting part of the cashew nuts in raw form. Each of the 100 entrepreneurs to be selected from the list of applicants will create 20 jobs directly, suggesting that in total, some 2,000 jobs will be directly created by the project in its first phase.

The project comes with some benefits from the government which will treat it as a special category and thus be issued with a single license to operate. It will also provide all needed licenses for free to motivate and attract individuals to become entrepreneurs.

The quality control and packaging of the cashews will be determined by Kamal Group so as to ensure that they meet the required international standard before exporting. Currently, Tanzania exports over 90 percent of its cashew nuts in raw form.

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