This archive report was first published on 5 August 2020.
On August 5, 2020, Cold Solutions Kenya Ltd made a significant announcement, pledging to spend $70 million (Ksh7.5 billion) to construct a state-of-the-art refrigerated warehouse in Nairobi and Mombasa.
The company has since settled on Tatu City, located on the outskirts of Nairobi, for its flagship cold house, which is expected to be operational within a year. The facility, spanning over 15,000 square meters, is touted as the most advanced and efficient in the region.
The choice of Tatu City as the location of the project is telling, given its proximity to Nairobi's Central Business District and its access to a bird's eye view of the road network, including airports and the Standard Gauge Railway terminal.
Access to agriculture produce is especially critical to cold storage investors, as nearly 60% of fruits and vegetables produced in Kenya are lost post-harvest. A huge chunk of this loss could be avoided by temperature-regulated transportation and storage.
For a country struggling with food deficiency and weak horticulture sales, such losses are untenable. The government's Big Four agenda prioritizes food security, and it makes sense for the country to prioritize feeding its own people from within its borders.
Closely linked to food security is the other Big Four agenda pillar: manufacturing. The government is doing many right things, such as building more roads, stabilizing electricity supply, and establishing Special Economic Zones. Tatu City is among these SEZs, and the only one operational in Kenya.
As an agriculture-driven economy, logic suggests that this sector will be the launchpad for the manufacturing agenda take-off. The entry of bigger players such as Cold Solutions and other local and international players suggests the game is rising to a level beyond the primordial.
For players in the construction industry, the growing demand for warehouse services for the agriculture sector presents attractive investment opportunities. There are many pointers to a growing appetite for agribusiness, and with many 'formal' and 'traditional' jobs and businesses devastated by the Coronavirus, agriculture and related activities are gaining more converts.
