Demand for avocado oil is growing in both the local and international market, creating room for new entrants in Kenya’s processing space. In an interview published on 2018-11-21, Kennedy Thiong’o, the founder of Kencado Oil, explained what it takes to start an avocado oil business and how producers can sell to retail buyers as well as companies making shower gels, oils, hair products and soap.
Thiong’o said the first step is to study the production process carefully, since different extraction methods can be used depending on the type of oil a business wants to make. He said a commercial setup can require between Sh500,000 and Sh2 million, with the final figure depending on production capacity and the quality of oil being targeted.
He added that machinery for extra virgin avocado oil is more expensive than equipment used to produce second- or third-grade oil. According to him, locally made equipment can cost between Sh800,000 and Sh2 million, again depending on capacity. He also pointed to the Kenya Agricultural and Livestock Research Organisation, which sells an electric oil presser at Sh70,000.
On licensing, Thiong’o said a business name is enough to begin operations, although a company registration may be necessary for firms that want to trade with established businesses. He said certification from the Kenya Bureau of Standards is also required at a cost of Sh5,800, and anyone producing avocado cooking oil must also obtain a health certificate.
Thiong’o also noted that a new entrant does not have to buy production machines immediately. Instead, a business can buy oil from established companies and package it under its own brand, or lease equipment at a lower cost.
