Patrick Mukundi Mbogo was working in a bank in Nairobi, Kenya in 2010 when he decided to quit his banking job to go into the production of macadamia nuts, which are the most expensive nuts in the world, value at $25 per pound. According to him, his inspiration for the business stems from a customer of his former bank to go into the production of macadamia nuts.
Mbogo recalled this particular customer coming to him every month looking to sell huge amounts of dollars. He said the practice was unusual as the popular practice was people rather looking for dollars to buy.
I got talking to him, and he told me that he traded macadamia nuts. I knew there were a lot of macadamia trees near where I was from in Embu (around 130km north of Nairobi), some of which were rotting away,” he told Howwemadeitinafrica. “So I did some basic training, learned how to check for good quality nuts, and started a small operation. I would buy the raw nuts from farmers and sell them to my former customer.”
His breakthrough came when he got introduced to an international client through an old friend who was working with Kenya’s Export Promotion Council. The international client, Swiss Gourmet, wanted to source macadamia nuts in Kenya and so they jointly set up a small joint venture in Thika town called Privamnuts.
“In the beginning, all the cracking and processing of the nuts was manual. We would ship three or four containers – up to 70 tonnes – a year. Swiss Gourmet roasted some of the nuts themselves, but they sold the vast majority of the nuts to third parties.”
In 2013, Mbogo acquired new land to construct new facilities in order to expand Privamnuts operations. This was after Swiss Gourmet pulled out of the joint venture, making Mbogo the sole owner. This allowed Privamnuts to sell in the open market.
Privamnuts now ships over 12 containers a year and has over 400 employees. And with the expansion of the firm’s facilities, Privamnuts has a capacity to process around 7,000 metric tonnes per year of raw nuts.
According to Howwemadeitinafrica, a full 20ft container of shelled macadamia nuts can now sell for up to $300,000. By Mbogo’s calculations, his company is the fourth largest of around 10 major macadamia exporters in Kenya. Kenya comes in third behind Australia and South Africa as the world’s largest producers of macadamia nuts, exporting around 8,600 tonnes of kernel a year.
Mbogo has other plans. He wants to diversify into the production of other agricultural products like dried fruits. “Most of our customers buy a range of different agricultural products, so we have market access. Once you make inroads in one product, other products become easier. The key is just getting into that arena, talking to buyers, and building up trust,” he said.
Achieving success did not come easy for Mbogo. According to him, maintaining cash flow was his biggest challenge. He noted that it takes at least three years for a tree to start producing nuts which makes investors hesitant to commit funding.