Kentegra Biotechnology was founded in 2017 and has quickly grown to become the leading pyrethrin producer in Kenya. Finnfund, the Finnish development financier and impact investor, and the United States International Development Finance Corporation (DFC), a development finance institution and agency of the United States federal government, participated in the funding round, which gathered equity and lending capital to expand Kentegra Biotechnology’s operations.
The investments, totaling US$15 million in aggregate, will enable Kentegra to process pyrethrum flowers from 90,000 small-scale farmers in Kenya. Kentegra Biotechnology produces and sells pyrethrin extracted from dried pyrethrum flowers to global insecticide and pesticide manufacturers.
“The production creates livelihoods to over 10,000 contracted farmers who are trained and practice regenerative organic agriculture practices to grow raw material, flowers. They are supported by highly trained Kentegra agronomists on sustainable and eco-friendly farming practices. This enables local communities to receive a considerable and dependable income with which they can educate their children, obtain health insurance and generally improve their living conditions”, says CEO Brian McKenzie, Kentegra Biotechnology.
“Kentegra is a company that meets all investor expectations, both in terms of commercial success, sustainability and impact. It has plenty of growth potential in a very interesting upward trending market. The company is also managed by a very talented and professional team, and its operations have significant development impact,” says Johanna Raehalme, head of Finnfund’s Nairobi office.
“DFC’s support for Kentegra will expand the company’s production capacity for a key ingredient in organic pesticide and grow the number of local Kenyan farmers from which Kentegra purchases pyrethrum flowers, focusing on growing its network of women farmers. With DFC’s support, Kentegra will increase the percentage of women farmers it works with, providing these farmers with greater and more predictable income, as well as training to implement best farming practices and financial planning tools.” says James Polan, Vice President of DFC’s Office of Development Credit.
Kenya produced over 80% of the world’s pyrethrum in the 1990s, with over 250,000 farmers cultivating the crop. The production, however, dwindled due to competition from cheaper synthetic insecticide. New investments are now reviving the production capacity. Growing demand for organic pesticides and ‘greener’ produced food is fueling growth globally.
Tightening regulation also creates a competitive advantage for organic products compared to synthetic alternatives. Pyrethrin is used especially in the production of pesticides used in agriculture and households.
Nearly half of the contracted farmers are women, like Gladys Mbithi, who says her income has increased eightfold (8x) since she started working with Kentegra. With the income, the farming family has been able to cover their children’s school fees, buy their own home, and start a new business project that brings additional income.
Pyrethrum flowers produce pale refined extract (PRE), which is used as an active ingredient for manufacturers in the insecticide and pesticide industry.
Farmers are paid a minimum Kes. 260 (approximately US$ 1.80) per kilo of dried flowers approximately 4 days after delivery. This represents nearly two to three times the income farmers would earn growing alternative crops, and they can sell their crop every two to four weeks instead of a couple of times a year.
Half of the contracted farmers are women.
Pyrethrum value chain is identified as a key national economic growth and transformation sector.
Kentegra Biotechnology is a Kenyan-American company seeking to help revitalize the pyrethrum sector in Kenya. They are currently operating in over seven counties in Kenya with over 10,000 contracted farmers. With the liberalization of the sector in Kenya and the ‘go-green movement’, Kentegra is positioned to be a world player in the pyrethrum industry and provide a sustainable income for farmers in Kenya.