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Dehydration of Vegetable Products


The project is to set up a dehydration plant that will be able to dehydrate over 100 tons of raw vegetables in the long run.


This idea won a prize in the 2009 Africa Rural Connect Competition and therefore cannot compete in any subsequent ARC competitions.

The Executive Summary

 This is a project that is aimed at improving Small Scale farmers in Molo District –Kenya. It is also aimed at creating jobs to the local farmers and residents, reducing hunger and increasing production for local consumption and for export and sale locally.

 The major problems that face our people/smallscale farmers in the district are:

(1)     Lack of a ready market for their products/vegetables that will give them or yield better prices for their produce. Due to poor prices of their produce, the farmers are paupers, such that they cannot afford a decent life, educate their children or afford proper medical care.

(2)     Farmers do not have a dehydration plant for their produce/vegetables that are in plenty. This could assist them in fetching better prices for these produce if marketed locally to the hungry in other parts of the country and also exported to other countries, where they can fetch better prices.   

 The above problems can be alleviated if the farmers can be assisted in setting up a processing or a dehydration plant for their produce. This plant will encourage farmers grow more of this because they will have an access to a market of their produce collectively, this will also reduce wastage of their produce, because most of it goes to waste due to lack of a ready market. These produce/commodities are perishable in nature and require a ready market. A dehydration plant will cater for this need of preservation and therefore wastage reduced lay 90%

 This project is targeted to benefit more than 100,000 smallscale farmers and a few large-scale farmers in the long-run. It is also estimated that the smallscale farmers and large-scale farmers would create more than 50,000 jobs indirectly through employment. The project will employ its staff that is estimated at 30 initially but expected to rise to 250 when we reach the optimal stage, including senior staff.

The project is self-sustaining, since we shall set aside 20% of sales price to cover all direct and indirect costs (overheads). This project requires a funding of US$ 3.7M in the long –run, but initially we require US$ 500,000 as the first phase of the project. The second face will require US$ 2.20Million and the third face might require about US$ 2,510,000.We hope that the plants’ retained earnings will fund the second and the third phases.

 A highly competent team of managers and professionals led by the initiator Mr K. T. Kabia CPA (K), CSIA (EA), heads the project. Other supporting staffs are; the manager, technicians, who will be trained by the commissioning agents of the plant for at least three months after installation and other supporting staffs.

 Statement of need

It is well known that the Kenyan western highlands are very productive in agricultural based products. (For many years dating back from 1965 when co-operative societies were established to take over farms from the white settlers or farmers, small scale farmers have been languishing in poverty due to lack of sufficient constant income from their farm produce.)  This is currently the Molo District, which is also famous for its rams. In mid 1970’s, co-operative societies failed in serving their members and all of them were liquidated giving rise to small-scale farms on ten acre of land or less. This was the beginning of small-scale farming, mainly for domestic consumption and the excess for commercial sale. The main products from these small farms are; potatoes, vegetables, milk, peas, maize and, beef and mutton.

The central region of the district is about 205 km from the capital Nairobi. Nairobi is the main market for most of the farm products produced by these small-scale farmers. Transport costs are and the nature of the products hinders the smooth marketing of these products to this market.

In recent times transport costs have gone up sharply and this has rendered the sale of these products almost impossible to this market, on the other hand, selling to middlemen has not been encouraging since they buy at very low prices which do not even cover production costs of these commodities. The nature of these products is another factor to consider, that of being perishable, they cannot be harvested and stored to hedge against good prices in future or being stored for a long period of time awaiting transportation to the nearest market, 200kms away.

Due to these problems, farmers have been discouraged in growing these products; this in turn has resulted in increased poverty and increased unemployment in the region. As poverty has stricken the region, many small-scale farmers are unable to lead a decent life, educate their children or construct a decent house to live in.

In this region there are no industries or factories where the local can get employment and live a decent life, no government project has ever been initiated to alleviate this acute level of poverty in this region. If only a self-sustaining project can be set up in this region, locals can be able to solve some of these problems or reduce them substantially to a manageable levels or magnitude. The inhabitants of this region are very hardworking and they long to have such a project that will cater for these problems or reduce them substantially. Farmers in this region are very poor and to raise money to start such a project will be an exercise in futility. The government agencies that initiate such projects, has never approved this kind of a project, as the government do not fund such projects.

The need for this project is acute as it is expected to accomplish various goals and objectives, such as:

a)      This project will encourage farmers to grow vegetables in large quantities to take advantage of the project;

b)      Farmers will utilize the uncultivated chunks of land lying idle to productive use or put to better economic use;

c)      It will create jobs to the idle youths either directly by being employed by the plant or indirectly by being employed by farmers a farm workers;

d)     Reduce hunger substantially as it will process its products to be sold to those who are in need, from the semi arid and arid areas of the country and export to other countries who are in need of these products;

e)      It will encourage those who have left their land for a better life somewhere else to come back and utilize the land left behind; and

f)       This project is also aimed to bring together various communities living in the district and create harmony among them.

We also, have a cold storage facility for potatoes, this, was set up by the defunct ADC farms management in the district, the facility is no longer in use. This cold storage facility cannot handle 10% of the produce, and its management has collapsed, we hope that these facilities will be receded to the small-scale farmers for use in storing their produce when need arises.

In summary we foresee that this project will improve the lives of the farmers by providing better prices for their produce and in the reduction of wastage due to transport problems and the perishable nature of their produce. Other social factors will set in, such as, reduction in social unrest and other vices.

Project Description


The main objective of this project is to empower small-scale farmers of Molo district through the provision of processing and marketing dehydrated vegetable products locally and nationally, and thereby increasing their wealth, creating jobs in the district and reducing hunger of the masses.

 These will be achieved by:

a)      Collaborating with agricultural officers in the area, who will teach farmers better methods of growing vegetables;

b)      Setting up a dehydration plant that will process vegetable products brought in by the farmers;

c)      Providing better prices to their products by making sure that marketing of the product is made competitively;

d)     Directly employing some of the farmers in the operations of this project;

e)      Making sure that within 1-year farmers will have increased output of their produce and substantially improving methods of farming.


We shall import the plant from SSP India Private Limited, which will be delivered within three months from the date of purchase. During period we shall be in the process of sensitizing farmers on the project and its benefits to them. We shall encourage them by providing them with seeds to prepare for the planting of these vegetables before the arrival of the plant.

The plant will be installed and start operating within two months on arrival. By this time farmers will have planted vegetables and they will be ready for dehydration, parking and delivery to various destinations in the country and other parts of the world. Thus the project is expected to start its operations five months after the funds are made available. Molo is a cool place, and agricultural activities are carried out throughout the year, where the short dry seasons can be taken care of by irrigation water, which is plenty, although we shall encourage the government to revive all public dams by renovating so that within three years of our operations we shall be able to have flowing water throughout the year. Five months are suitable to make our house in order, in setting up the plant and also engaging a marketing and sales agent, so that our products will have a ready market. One of the readily available markets is the Red Cross Society who usually buys for distribution as relief food to those affected by famine, also, the government of Kenya, to feed her starving citizens.

Staffing and Administration

The project is expected to sustain itself, in the short and long run. The plant will have a staff of 30 persons/employees on daily basis. The staffs are classified as follows:

 The MD                                                                       1

The manager                                                               

            Plant                                                                1

            Sales and Marketing                                       1


1                    Plant Operations                               1                                 

1                    Vegetable handling                            1                                 

1                    Buying and Transportation                 1                     

Plant Operations                                                         10

Sales personnel                                                            4

Vegetable Handling                                                    5

Buying and Transportation                                         5 

Total                                                                            30


The Managing Director: Karungo Kabia CPA (K), CSIA (EA).

 K. T. Kabia was appointed MD since the registration and incorporation of the company on 25th July 2005.

He first graduated from Kiambu Institute of Science and Technology with a certificate in Building Construction in 1985. He joined later Kenya Technical Teachers College and graduated in 1997 with a Diploma in Education. He also joined Strathmore University College and graduated in 2001 after completing the CPA examination.

In June 2006 he graduated from Star College of Management Studies after completing The Certified Securities and Investment Analyst course, which he passed in June 2007.

He is a member of the Institute of Certified Public Accountants of Kenya-ICPAK and The Institute of Investment Professionals of East Africa-IIP (EA).

He has more than 20 years of experience in lecturing, accounting, auditing, financial management, investment and security analysis, consulting and taxation.

Director: Nancy Wanjiku Maigua-CPS-Director

Nancy Maigua was appointed Director on 25th July 2005 when the company was incorporated. She graduated from Kericho Teacher’s College in July 1995 She is currently enrolled with Kenya Accountants and Secretaries National Examination Board and preparing to sit for the Certified Public Secretaries CPS examinations. She has more than 13 years in teaching. She currently hopes to complete her studies in the next 4 years.

Management Team    

Senior management team will be led by the board of directors and assisted by a team of experienced key managerial personnel, but initially we shall have one manager and Sales and marketing manager who will assist the directors in identifying personnel fit for the purpose.

The CV Of Other Staff

The Manager

The manager will be expected to be a graduate from UoN with a degree in farm management and a Diploma in Co-operative Management from Kenya co-operative college he should have worked for over 5 years in the farming industry, 2 of which he has been a manager in a processing plant.

 The Supervisor

He should be a graduate from Kenya Polytechnique with a higher diploma in mechanical engineering.

 Other Operators

 All the other operators are expected to have at least a diploma in mechanical engineering in this field.

We shall prefer a HND from the Kenya polytechnic or Mombasa polytechnic.

 Marketing and Sales Manager: Ms Anne Nyambura Kamau

 Ms Ann Kaman aged 30 is a graduate of Kenya Institute of Management-KIM she has a series of qualifications in the marketing field. She is currently attending part-time courses at KIM for a Diploma in marketing management. She completed her advanced certificate in Marketing Management in September 2007 while working with Vital Marketing Services since 2001when she obtained her first certificate in marketing management.

She has worked for over 8 years in marketing and she has a lot of wealth in this field and she has the know-how of interacting with customers and identifying their needs. She will be responsible for hiring and recruiting flyer girls, advertising and locating customers.

She has also been a sales merchandising supervisor with Vital Marketing Services for 4 years, and dealt with customer complaints, preparation of weekly and monthly reports, execution of promotions and marketing programs for the products in the selected retail outlets, monitoring product performance and competitor etc.


Our objective is to dehydrate at least 1,000 tons per month in the first year due to the limited capacity of the processor; this in total is at least 12,000 tons. This is expected to involve about 24,000 farmers who will each is supply half ton of the product for processing/dehydration. In this period of the first year, we hope that only a few farmers will heed our call, but we hope this to double in the second year and attract more than 48,000 of the farmers.

We shall also make our books of accounts to be audited so that we can measure our progress and performance.


This is a project that is expected to be self-sustaining, the project marketing and sales department will be retaining 20% of the sales proceeds to finance operations costs and for future expansion. This 20% retention of the funds will stimulate growth in the plant, by apportioning this amount to cater for various expenses and to purchase capital equipments as follows:

-6% will be used to pay off workers salaries and wages

-4% management salaries and financial charges

-10% retention for: expansion and replacement of assets.

The Budget

Production                                                                                                     SHS

10,000 tons wet vegetables (cabbages) yields 2,500 tons @ shs 50,000 p/ton                                                                                                                          125,000,000

Payment to farmers  10,000/=per ton *10,000tons   (80%)            100,000,000

Operations                                                              (20%)                                       25,000,000


Other Expenses

 Salaries and wages

MD                                             @40,000/=                              480,000

2 Managers                             @35,000/=      12*70,000       840,000

3 Supervisors                          @20,000/=      12*60,000       720,000

10 Plant operators                  @15,000/=      12*150,000  1,800,000          

5 vegetable handlers              @  8,000/=      12*40,000       480,000          

5 Buying and Transporting       @  8,000/=                  “          480,000

20 Casual workers (wages     @  6,000/=      12*120,000  1,440,000

1 Supervisor Sales & Mking   @25,000/=      12*25,000       300,000          

4 Sales Personnel                      @12,500/=      12*50,000      600,000          

Accountant, clerk and subordinate staff (4)                              360,000

Total                                                                                             7,500,000


Other Administration Expenses

             Motor vehicle running Expenses                                   500,000

            Financing costs & Loan repayments                             900,000

            Telephone and Postage                                                   240,000

            Traveling and Accommodation                                      300,000

            Machinery Running Expenses                                        450,000

            Electricity and Power                                                   2,050,000

            Marketing & advertising                                                 100,000

Repair and Maintenance                                                160,000

            Legal and Professional Fees                                              50,000

            Auditing Services                                                             100,000

            Other Expenses (printing, stationery etc)                   150,000

Total                                                                                             5,000,000

Grand Total                                                                                12,500,000

 Retention for future growth                                                     12,500,000

 Total Expenditure                                                                     25,000,000

 The project cost

 Cost of the project      US$ 500,000 equivalent to KSHS 40,000,000

 To be used as follows:

             Cost of machinery                                                       32,000,000

            Installation and Commissioning costs                        2,000,000

            Building and warehouses                                              2,500,000

            Lorries (for transporting raw vegetables)                 3,500,000

            Land at cost                                                                       400,000

            Van at cost                                                                      1,200,000

Total assets at cost                                                                  41,600,000

 The first phase is expected to cost KSHS 10,000,000 equivalent to US$ 125,000; this is a small plant that will process about 2,500 kg of vegetables per day (out put).

The retained earnings as shown above will fund the remaining part of the plant.

 Notes to the Budget

We expect to dehydrate/process between 10,000 and 12,000 tons of vegetable in the first year of our operation, these vegetables after processing will be expected to give an output of about 2,500 tons of the dehydrated product.

We expect to sell all the dehydrated vegetables at KSHS 50,000 per ton, that is, SHS 50 per kg, this is the minimum that we can sell. When exported 1Kg can fetch more than SHS 100 per Kg.

We expect salaries and wages for all of our employees to remain constant for the first three years.

The plant will be hiring casual laborers at Kshs 6,000 per month this is well above the minimum wages set by the government. We assume that we shall be hiring 20 laborers per month.

Finance Costs and Loans

We have planned to acquire a lorry through hire purchase, we expect to be paying Kshs 70,000 per month and interest of Kshs 5,000 totaling Kshs 75,000.

Electricity and Water

The plant is expected to consume power and electricity of about Kshs 175,000 per month. This is estimated according to the power requirements of the plant.

Other Expenses

These are those expenses that are not substantial in amounts, these are, for example: printing, stationery, office general expenses, cleaning, environmental expenses etc.

The proprietors will provide a van for the project that will be used to collect available vegetables from nearby farmers and farms. It will, also, be used by management for other transport needs.

We assume and hope that the above estimated costs will remain constant for at least one year in our operations, and that overheads will be less than the forecasted after two years in our operations.

Nacico Plaza, Landhies Road

P. O. Box 6745 00100

Nairobi, Kenya

Tel: +254 20 2500282

Mob: +254 725 161540

Email: [email protected] or [email protected]



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