CHANGING WITH THE TIMES

Agro Chemical and Food Company

John Lennon isn’t someone who we immediately think of as a business guru, but there can be few better pieces of business advice than “Life is what happens to you while you’re busy making other plans”. That’s not to say that a good business plan isn’t important, but recent history is full of businesses whose best-laid plans were thrown asunder by the financial crisis, as well as start-ups that took off far beyond even their founders wildest dreams. At the end of the day a business’ success will depend as much on their ability to adapt to unforeseen circumstances, as it will on the quality of their plans.

The Agro-Chemical and Food Company is a perfect example of just that. The company came into existence in 1978 as a collaboration between the Industrial and Commercial Development Corporation (or ICDC), the Agricultural Development Corporation (ADC) and the Government of Kenya. Originally the company was founded to take cane molasses and, using the latest technology, produce bakers’ yeast for food and power alcohol for use as fuel. The idea belonged to Mr M.N. Mehta, Chairman of Mehta Group International, who saw that Kenya was producing large amounts of molasses and believed the country could put it to good use. The move would have the added advantage of reducing foreign exchange used to purchase petroleum oil from abroad.

Early on, it became clear everything wasn’t going to go exactly according to plan. The oil industry was reluctant to co-operate with the news scheme and resisted the idea of blending power alcohol with petrol, so that for its first three years in business the ACFC was only operating at 30% capacity. By 1988 they had managed to build sales to the point where they were operating at 75% capacity, and by the early 90s the company was already starting to see interest from export markets in Europe. Still, realising that power alcohol was not enough to support the business on its own, ACFC diversified its product range to include industrial alcohol, as well as other grades of alcohol. This included “neutral alcohol”, which was in high demand by both the beverage and pharmaceutical industries.

The move proved to be a success, and since 1991 ACFC has broken a number of production and sales records. In 1996 the government’s involvement in the company was moved from the Ministry of Energy to the Ministry of Agriculture. Over the last decade the company continued to grow by responding to market needs. From the year 2000, as the demand for a higher quality of beverage alcohol grew, ACFC responded by installing a new plant capable for producing “extra neutral alcohol”.

Today the company’s mandate is to produce and sell

a variety of grades of spirits and yeast using Kenya’s high quality sugar cane molasses, creating employment and economic gains for both the Kenyan government and the country’s shareholders.

ACFC’s journey is far from over however. For most of its life the company has enjoyed the privilege of operating as a monopoly. In recent years this has changed with the appearance of new competitors on the market. So once again ACFC is reviewing its business and marketing strategies.

Target MarketsToday ACFC offers a range of products. On one side of the

business, they sell spirits for beverages, pharmaceutical and industrial purposes. This includes Rectified Spirit, commonly used in the pharmaceutical and cosmetics industry. There is also Neutral Alcohol, which many local businesses in the region use to fortify their wines. Finally there is Extra Neutral Alcohol, a top of the range extra-fine alcohol used for alcoholic beverage of international standards, again, a market the company moved into to meet growing demand.

The other side of the ACFC’s customer base is the market for yeast. There are two main forms of yeast that ACFC sells. Active Dry Yeast is a product they have been selling since the beginning. This product is used in both baking and brewing processes, and the company is constantly investing in new technologies and techniques to improve the quality of the yeast available.

Wet yeast is a relatively new market for the ACFC, and the firm is striving to ensure that this new product is of a quality that can compete with cheaper imported yeast.

Values Worth Sticking WithWhile the companies markets and goals may have shifted

over the 22 years since it was founded, throughout its life ACFC has adhered to a strong core set of values that have seen it through even the most troubled times. Behind everything the company does there is the goal of producing quality products and the utmost customer care while remaining environmentally friendly. Professionalism, integrity and equal opportunities at the centre of everything ACFC does.

Of course, plenty of companies are quick to talk up their green credentials, but ACFC walks the walk as well as talking the talk. Its industrial effluent treatment process includes serious considerations of the “four Rs” of waste management: Reduce, Recover, Re-Use and Recycle.

But ACFC has taken its responsibilities further, not just monitoring its environmental impact but doing everything it can to give back to the community that supports it. The firm provides a free supply of clean water to its local community

The Agro Chemical and Food Company hasn’t had a smooth ride since its inception 22 years ago. But by paying attention to the market and being willing to adapt to changing circumstances, it’s shown it has what it takes to succeed.

Agro Chemical and Food Company

and pays the school fees for orphaned or disadvantaged children. The company has also supported HIV awareness campaigns, educational, medical and infrastructural programmes and provided help with disaster response operations.

These efforts include an outsourced health facility that provides for both ACFC’s employees and their dependents. The well-equipped facility has a doctor, two clinical officers, a laboratory technologist and support staff.

The reasons for this are self-evident. As the ACFC website says: “A healthy workforce means a healthy manpower to any organization; hence ACFC strives to offer its employees the medical services they need just in time.”

As well as taking care of its employees physical needs, the health centre also promotes sensitisation programs to face social challenges such as the HIV/AIDS pandemic.

The company’s efforts have been recognised across the industry. In 2002 and 2003 it was voted the company with the best Environmental Management Practices at the Company of the Year Awards arranged by the Kenya Institute of Management. The firm also produced the runner-up for the Professional Manage of the Year in 2002 as well.

On top of this, ACFC is constantly improving its certification, being one of the few parastatals in Kenya to achieve an ISO 9001:2000 certification for quality.

As for what’s next for ACFC? Who knows. One thing you can be sure of, however, is that however the market changes, ACFC will be the first to adapt to whatever circumstances are thrown their way. It’s a way of doing business that has worked well for them so far.

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Agro Chemical and Food Companywww.acfc.co.ke+254 20 233 4020

Written by Chris Farnell

www.littlegatepublishing.com