Auctioneers have recently been knocking on the doors of billionaire businessman Peter Munga and former Thika Town MP Patrick Wainaina, chasing unpaid loans linked to their macadamia processing companies.
Mr Munga, who is better known as the founder of Equity Group, is the majority owner of Maragua-based Equatorial Nut Processors, which he started in 1994. Mr Wainaina, popularly known as ‘Jungle” owns Jungle Macs EPZ, a Thika-based processing firm that also produces avocado oil.
The pair has invested in a diversified portfolio of businesses over the years, making it unclear whether the woes facing their macadamia firms are solely linked to the downturn in the sector, or have deeper roots elsewhere.
In Mr Munga’s case, the auctioneers are targeting his 75 million Britam shares, which he used as collateral to guarantee a Sh433.8 million loan advanced to Equatorial Nut by ABC Bank. At present value, the Britam shares are worth Sh544.5 million.
Previously, in 2017, he was forced into a last-minute settlement of a loan to save his property, in this case five houses in Nairobi worth Sh400 million that were to be sold by Jamii Bora Bank (now Kingdom Bank).
In addition to the 75 million shares that are under threat of auction, Mr Munga retains a stake in Britam through two investment vehicles known as EHL 2022 and EH Venture Capital Kenya, which together hold 405 million shares valued at Sh2.94 billion.
Jungle Macs
For Mr Wainaina, details of the troublesome loan remain scanty as the auctioneers remained tight-lipped about the amount due, only disclosing that the money is owed to Stanbic Bank.
The two properties in Thika measuring a total of 4.39 acres are registered to Jungle Macs, the company through which Mr Wainaina built his 20-year-old macadamia empire.
Like Mr Munga, his interests have also diversified over the years since he formed the macadamia company in 2004, drawing on his experience as an engineer at Kenya Nuts Company, a macadamia and cashew nut processor owned by billionaire Pius Ngugi.
In 2017, he successfully vied for the Thika Town MP seat, serving for one term before a failed bid for the Kiambu governor post in the 2022 general elections.
Away from politics, he also ventured into the real estate sector through a subsidiary called Jungle Housing, which targets affordable housing, and Jungle Energy, which deals in the manufacture of wooden and concrete poles.
He also tried his hand at manufacturing mattresses and pillows using plastic waste in 2015 through a brand known as Jungle Foam.
Factories shut
While the pair has proven to be astute businessmen over the years by growing small enterprises into multibillion-shilling empires, tougher market conditions for local macadamia processors are putting their business acumen to the test.
These processors have come under increased competition for raw nuts—also known as nut-in-shell (NIS)— from Chinese buyers who took advantage of a window opened by the government allowing shipping of unprocessed macadamia to mop up supplies from farmers.
Section 43 of the AFA Act of 2013 prohibits the export of raw macadamia, except with the written approval of the Agriculture Cabinet Secretary.
In November 2023, the government offered a 12-month moratorium on this export restriction after farmers complained of a glut in their stores, which drove farm gate prices down from a high of Sh180 per kilogramme to Sh30. The window was extended by a month upon expiry last November, but is now back in place.
The glut was caused by reduced uptake of nuts from processors who at the time were facing reduced demand in their overseas kernel markets, most notably in the US where consumption was hit by higher inflation.
A section of processors, including listed agriculture firm Sasini, also pointed to Chinese raw nut buyers mopping up supply from the famers in the early months of 2024 (during the open window), which denied local companies a stable supply later in the year.
Some farmers have also resorted to picking immature nuts to meet Chinese demand, with poor harvesting techniques that involve shaking the trees (thus dislodging immature flowers) also hurting production volumes from farmers.
“You can expect that we will see more cases of struggling processors under these conditions. Only those processors with their own macadamia farms will be spared from the supply side difficulties,” said Frank Omondi, the founder and chief executive officer at Grow Fairly, a macadamia and cashew nut processor based in Kilifi County.
“A number of us have closed our factories since October due to limited supply of raw nuts.”
In its annual report for the year ended September 2024, Sasini said it had been forced to close its nut processing factory from January 2024 due to low supply of raw nuts, and also because the collapse in demand in the US had seen prices fall to an unsustainable level of $4 (Sh517) per kilogramme of kernel.
In order to deal with the problem of harvesting of immature nuts, the government barred harvesting of macadamia nuts between November 2024 and March 2025.
Mr Omondi, however, said that stricter enforcement of the raw nut export ban needs to be put in place, otherwise farmers would continue to flout the harvest ban as long as there is a ready buyer of their produce.
Data from the International Nut & Dried Fruit Council shows that Kenya is the fourth largest producer of raw macadamia in the world with an annual output of about 46,000 tonnes in 2023, behind global leader South Africa (92,000 tonnes), China (68,500 tonnes) and Australia (56,000 tonnes).
In terms of kernel exports (shelled macadamia), Kenya’s output stood at 7,816 tonnes, earning the country Sh5.8 billion in 2023, as per latest data from the Kenya National Bureau of Statistics (KNBS).
Murang’a, Meru and Embu counties are the top macadamia producing areas in Kenya, with annual output of 666.5 tonnes, 451.8 tonnes and 320.2 tonnes respectively in 2023.
