Speaking during the signing of the MoU, Agriculture, Livestock and Fisheries Cabinet Secretary Felix Kosgei said lack of proper use of fertiliser by the farmers has led to low yields, which is attributed to the purchase price.
“Fertiliser use per hectare has been very low and therefore productivity has been down, and that is why instead of the standard application of about 100-200 kilograms per hector Kenya is still applying only 31 kilos and it is because of the cost.”
“The farms they have now can even double or triple their production if proper application of fertiliser is used,” he said.
Kosgei says upon completion of the plant, there will be a significant drop in the cost of production in agriculture.
Transport and insurance when importing fertilisers have also been pin-pointed as the reasons why the cost is high.
He added that employment opportunities, potential for expansion of plants by TTC to different parts of Kenya, high yield, better profits, as well as creating a healthy competitive environment for fertiliser prices are just some of the benefits of the partnership.
Eldoret has been earmarked as the location for the construction of the plant. The Director and Senior Advisor Toyota Tsusho East Africa Dennis Awori says this is because it is at the centre of the biggest market for fertiliser.
“Transport is a big cost so if we can produce it as close to where the bulk is going to be used as possible, then we will reduce on the transport cost,” he said.
Due to high fertiliser prices, the government has been importing fertiliser and selling it at a subsidized price to the farmers most recently having procured 160,000 metric tons at a cost of Sh4 billion.
Awori says construction will begin by the end of 2014, adding the biggest drop in price will be actualised in phase two but they will need a stable source of natural gas at the right price.
“If Kenya’s natural gas deposits are found to be commercially viable, then it should be possible I’m sure with the assistance of the ministry to get that natural gas we need at the right price, that is when there will be a substantial drop,” he said.
Other areas earmarked for plant construction in the future include Mt Kenya, Western Kenya and the coastal region.
Construction of these other blending plants is so production of fertiliser can be soil and region specific as opposed to generic.