How APC seeks to ease investment in agro forestry

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BY VICTOR ADAR

It is four years since Konstantinos Kioleoglou, the man who has become synonymous with agro forestry plantation sector, came to set up Africa Plantation Capital’s operation in Kenya. Popular as Kosta, the expert valuer is here to establish a brand name while creating a strong network and stemming out challenges currently faced by the global timber and biomass industries.

Mr Kioleoglou is behind the driving seat of Africa plantation capital, a division of the APC group that was initially incorporated in 2002 as private entity. APC group which is the mother company, though, has been operating successfully for the last 15 years and currently has under management over 170 plantations spread in countries such as Thailand, Sri Lanka, India, Malaysia, the US and now Kenya.

Although the firm’s main operations are located in Asia, APC was established in Kenya in 2015 as entry into African region. Several months later, the firm has gathered more steam with the agro forestry player already looking for more land in order to proceed to phase two. So far, it has acquired 200 acres of land and has reserved another 800 acres strategically sitting between the port of Mombasa and the port of Lamu.

Supported by a multiple option road network together with the ongoing construction of new railway line, the location is expected to provide the ideal requirements for easy and low cost export of products.

“The first phase is always the most difficult,” says Mr Kioleoglou. “The pace we want to follow is between 800 and 1000 acres of plantation every year. The next step is to see the company growing more, going to second phase. Hopefully, by year five we will have set up 5,000 acres as initially targeted.”

To increase uptake of sustainable manufacturing solutions, Kioleoglou says that APC has introduced a vertical production line where the company does everything from land acquisition, seedling propagation, land preparation, plantation management all the way to harvesting, processing, marketing and sales for the final product which is fibre in the case of bamboo. Under sustainable forestry, they are investing in such species as Agarwood, indigenous in the Southeast Asia region; mostly in India, Thailand, Malaysia and eastwards to Papua New Guinea, Bamboo, Teak, Mahogany etc. and things are clicking.

In Kenya, APC is currently keen on developing Bamboo plantations. “For me, it is a personal goal to make sure that we will manage to set up a local process facility not only for bamboo fibre but also for other products,” he says. “Bamboo is a grass, an amazing grass, with several product uses. And here in Kenya, the first step will be to process bamboo fibre. The second step is to produce some textile and finally support our own line of Bootex. It is a personal goal to make sure that we manage to set up a local processing facility not only for bamboo fibre but also for other products.”

Agro forestry is big business, so it seems. In the case of bamboo, it is a species that has been identified as one of the most sustainable presenting a wide range of potentially lucrative commercial opportunities. But why spread wings in Kenya and not within other East Africa countries such as Tanzania, Uganda, or perhaps Rwanda? “We have decided to start with Kenya because this is a country with very good growth. We all know very well that this is an amazing country when it comes to growing anything. The soil is good, very good climate… Basically we are setting up plantations, and doing everything. We produce, harvest, export the bamboo biomass to be processed into bamboo fibre for the global market,” he says.

Large-scale projects in Kenya are usually successful – try to picture Del monte and Delamere – major investments will more likely pay off. He says: “Making money out of a big project is possible if you start properly. If you start a project the risk involved is important. You have to see what are the real expectations when starting. So what you can expect from a bamboo plantation or any agroforestry project is secure good income. It can provide good income from year five, and I am talking about a good steady income.”

Memorandum of understanding

A strategic partnership with the Kenya Forestry Research Institute (Kefri) by signing an MOU for collaboration in establishment, research and innovations on bamboo for increased productivity is the beginning of good things to come. As a highly renewable resource with properties similar to that of timber, bamboo can support green economic development thereby contributing to major national development goals such as Vision 2030.

DSC_2109If bamboo has been growing in the wild for 30 years – Arabuko-sokoke forest is a good example – what it means is that a project started on the same is truly based on data. Kefri has been growing and conducting research on bamboo since 1988. Kosta’s eyes are set on big things. He says: “You have to take advantage of every possibility to maximise profitability. What we believe is that large scale projects give the benefit of the economy of scales keeping the costs low and maximizing the productivity of our projects.”

APC is flourishing on the fact that bamboo is planted only once – you don’t have to re-plant yet you continue harvesting. And because the global demand for the clothing industry is growing day by day, the business becomes lucrative over time. With ready existing market in Europe APC is working on a pilot project to see how value products for the local market can be created and things are looking up with accolades to show for it.

In December last year, the company clinched Business of the Year Award under category of New Business of the Year, a ceremony that was organised by the Kenya National Chamber of Commerce and Industry.

In the less than 12 months of operations, the company has employed over 130 people; about 90 people are permanently employed and an average of 70 people working as casuals on a weekly basis. The firm is still expanding so much that by the end of 2017 it plans to set base in Kisumu and Thika towns, as a way of reaching grassroots.

Having international expertise, Kosta says, does not guarantee success believing that local expertise will never go wrong. But a mid the opportunities are dark clouds with the biggest challenge being the experience of buying the first piece of land.

“For me the best moment was to see when we planted the first bamboo finally, the first plant, a few months ago, we said ‘finally’, we can do it. It is happening. But it is not easy at all,” he says.

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