In December 2016, during the Business Awards organised by KNCCi, attendees were pleasantly surprised when the Presenter announced that the new business of the Year was not a real estate or service company but a company doing Green Projects! Africa Plantation Capital, posting an amazing rate of growth, has succeeded in establishing a strong footprint in Kenya in just over a year. The man behind the wheel of Africa Plantation Capital is Kosta Kioleoglou.
By Antony Mutunga
It has been part of the agenda for the APC Group to establish operations in Africa before 2020. The Group was looking for the correct timing and the right person to set up its first project in the continent. In 2014, the decision was made. All the required ingredients for success seemed to be there.
Without a doubt Kenya, was the ideal location to start. The best crop to grow was Bamboo, a highly renewable resource with properties similar to that of timber, supporting green economic development, thereby contributing to major national development goals such as Vision 2030. Finally, the right person to set up and run this operation was identified when Konstantinos Kioleoglou agreed to come on board and lead the project. He is popularly known as Kosta.
Despite several challenges, Africa Plantation Capital has accomplished an impressive course in a very short time thanks to correct planning, the right people and partnerships according Kosta, who is also Regional Managing Director.
“The strength of APC is our human resources. Around the world, the group employs more than 2000 people. In Kenya alone, we have on board over 90 personnel – a great scientific and management team. On a daily basis, we employ about 70 casual workers,” says Kosta.
“From simple workers to highly educated and experienced scientists a company can find the right people to create a successful operation, and Kenya has plenty of that to offer.”
Today, just a few months into operation, Africa Plantation Capital has established a state of the art Bamboo plantation in Kilifi as well as two bamboo arboretums. The company has also established nurseries and a large CSR project in Busia County, which is about to take off. It targets river conservation. As well, the company has plans to have over 5000 acres of bamboo plantations under its management in the next five years and set up processing facilities locally, targeting to export the end products via its international network to foreign markets.
Agroforestry is full of opportunities and Kosta 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. The APC group has been operating over the last 15 years and currently has over 170 plantations under its management in Thailand, Sri Lanka, India, Malaysia, Kenya and the US. The group currently operates 5 distilleries and 5 boutiques. Headquartered in Geneva, the other offices serve as its operational bases.
This new expansion is to facilitate the group’s major investment into a forestry plantation sector that could be crucial in meeting the challenges currently faced by the global timber and biomass industries, as well as driving the quest for sustainable manufacturing solutions.
In Kenya, Africa Plantation Capital had to make a strategic decision concerning the ideal area to set up its plantations. After a lot of market research and consulting, they settled on the Kenyan coast – in Kilifi.
The fact that KEFRI (Kenya forestry Research Institute) has been successfully growing Bamboo in the area since 1988 motivated the company settle for this region.
Supported by a multiple option road network together with the on-going construction of the standard gauge railway, the location is expected to provide the ideal requirements for easy and low cost export of products.
“It is not a secret that phase one is always the most difficult, with several challenges and a lot of mistakes,” says Kosta, in response to our enquiry about how fast the company plans to expand. “Now we have the requisite local experience; we have definitely learned from our mistakes and we are ready to move forward. Our target is between 800 and 1000 acres of new bamboo plantations set up every year. The next step is to see the company expand. We are working hard to ensure that by the fifth year, we will have set up 5,000 acres as initially targeted.”
Unique business model
The success of APC Group around the world is based on its business model. In order to increase uptake of sustainable manufacturing solutions, and create a lucrative value chain, Kosta 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.
“We prefer to grow a crop that gives us the option of diversified end products that can target different markets. Bamboo, for example, has several uses from flooring to food, construction, activated carbon, bio fuel and fibre for the textile industry.”
In Kenya, APC’s primary objective is to develop Bamboo plantations. “It is our objective to make sure that we will set up a local processing facility not only for bamboo fibre but also for other products,” Kosta says.
“Bamboo is a grass, a sustainable grass, with several product uses. International brands such as Bootex and Ecotech have created demand for our bamboo products. The group is ready to manage the biomass produced in Kenya and bring it to the rest of the world via its international sales network.”
The group is excited with its bamboo operations in Asia as well as in Kenya, not just because of its lucrative potential but also for the great environmental impact that can be achieved.
“Bamboo is one of the most lucrative agroforestry products; helping the environment while creating great returns – no wonder it is referred to as the miracle crop. Bamboo has been used for everything from food to bridge building to the clothing industry for centuries. While it grows fast and gives amazing yields (when properly grown), bamboo also absorbs carbon dioxide and releases 35% more oxygen into the atmosphere than an equivalent stand of hardwood trees. It has a remarkable growth rate.”
“Some species of bamboo grow more than three feet a day. When it is harvested, it will grow a new shoot from its extensive root system with no need for additional planting or cultivation. Another plus of bamboo is its versatility. It can replace the use of wood for nearly every application. Not only can it be used as a food source but can also successfully replace cotton fibre, providing high quality materials – stronger than the traditional cotton fibres and smooth as cashmere,” Kosta offers.
Another key factor for successful agroforestry projects is the size according to Kosta. “Large-scale agriculture and forestry projects anywhere are usually successful. But size alone does not guarantee returns. To make money out of a big project, you need to work hard and plan a lot. A primary factor that needs to be considered is the risk involved. When starting, you have to see what the real expectations are. Short cuts are not the way to go. The investor has to be ready to spend in order to collect. A large-scale project provides you the benefits of the economy of scales and makes possible the creation of an integrated value chain.”
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.
“The company has been awarded several times in Asia and Europe,” says Kosta, but winning the New Business of the Year Award during the KNCCi awards last year has an extra value for us. It is the confirmation that all our efforts have a positive result; we are determined to continue towards a successful venture, expand more, create jobs and a leave a better environment.”