Government mulls leasing pyrethrum processor to private operator amid Sh3.5 billion debt
CS Kagwe said the company is generating only Sh35 million annually, with occasional spikes to Sh60 million, a trend he warned is far from enough to sustain operations or clear mounting liabilities.
The government is considering leasing out the Pyrethrum Processing Company of Kenya (PPCK), which has accumulated debt amounting to Sh3.5 billion, a move Agriculture Cabinet Secretary Mutahi Kagwe said is necessary to restore the struggling processor.
Appearing before Parliament on Wednesday, Kagwe said the company is generating only Sh35 million annually, with occasional spikes to Sh60 million, a trend he warned is far from enough to sustain operations or clear mounting liabilities.
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The CS explained that the proposal to bring in a private operator had already been captured in a Cabinet Memorandum and was undergoing final review. He said the approach followed months of consultations and had won the support of PPCK employees, who believe the involvement of the private sector would help revive the state corporation and rebuild the once-thriving pyrethrum industry.
Responding to Senators’ questions on the state of the sector, Kagwe said the processor’s revenue was too low to meet basic operational needs and noted that no consistent funding had been set aside for research, a key component required to maintain global competitiveness.
“There is simply not enough money to sustain the organisation itself,” he said.
He added that farmers supplying flowers to PPCK were owed Sh10 million for deliveries made in the last three months, funds the government had committed to clear immediately. He warned, however, that settling the arrears would not resolve the firm’s broader challenge, which includes Sh3.5 billion in debt made up of unpaid supplier claims and accumulated pension dues.
The CS confirmed that earlier discussions on selling some of the corporation’s assets stalled due to delayed valuation reports.
“No assets have been sold to date,” he told the House, noting that any future restructuring must be based on accurate valuations and a transparent process. Leasing, he said, remained the most viable route to restoring PPCK’s sustainability.
Kagwe said the government would first clean up the company’s balance sheet, undertake a fresh valuation of its assets and conduct full due diligence before inviting a private operator to take over its management. He said Cabinet approval would pave the way for a long-term strategy aligned with competitive private-sector models.
Senators, including Prof Tom Ojienda (Kisumu), Enoch Wambua (Kitui), George Mbugua, Daniel Maanzo (Makueni) and Eddy Oketch (Migori), questioned the overall status of pyrethrum production, market prospects and the future of the sub-sector. In his response, Kagwe defended government interventions, saying ongoing reforms were beginning to rebuild confidence in the industry, historically one of Kenya’s major foreign-exchange earners.
On the suitability of Homa Bay County for pyrethrum cultivation, the CS said the region did not meet the ecological thresholds required for the crop.
“Homa Bay County is not a pyrethrum-growing zone since the climatic conditions are not favourable,” he said, citing the county’s altitude range of 1,163 to 1,219 metres, rainfall of 700 to 800 millimetres and temperatures between 17 and 34 degrees Celsius.
He noted that pyrethrum thrives in high-altitude regions between 1,700 and 3,000 metres, with annual rainfall above 800 millimetres and cool temperatures below 18 degrees Celsius.
He said the position had also been confirmed by the Homa Bay County Government in a letter from the Deputy Governor dated May 28, 2025. Counties suitable for cultivation, he said, were in Kenya’s highland belt across regions in the North Rift, South Rift, Central, Eastern and parts of the Lake Region, including Kisii and Nyamira.
Kagwe highlighted several reforms being implemented to revive the sector, including the distribution of clean and high-quality planting materials to counties such as West Pokot, Elgeyo Marakwet, Nyandarua, Nakuru and Kericho. He said the government was also expanding extension services and ensuring uniform farmer training through a standardised manual.
He added that the Ministry was supporting the multiplication of clonal materials through tissue-culture laboratories in Muguga and Molo to improve farmers’ access to certified plantlets.
“We are multiplying clonal materials through tissue-culture technologies to ensure farmers access clean planting materials,” he said.
The CS told Senators that the government was promoting public-private partnerships to boost production and value addition, citing companies such as Botanical Extracts, Kentegra Biotechnology and Africhem Technologies as key investors supporting the sector’s revival.
“We are encouraging the participation of the private sector in the growing and processing of pyrethrin to make the sub-sector more competitive,” he said.
On financing, he noted that the government allocated Sh105 million to PPCK in the 2024/25 financial year and Sh125 million in the current year for debt settlement, seed purchases, propagation and extension services. He admitted the funds were “not adequate to revive the pyrethrum industry”, but said the ministry was working within available resources.
Addressing concerns over delayed payments, Kagwe said the Agriculture and Food Authority was regulating all stakeholders to ensure timely payments based on pyrethrin content. He said PPCK had intended to adopt an advance-payment model, but cashflow constraints had hindered implementation.
“The advance is meant to cushion growers and enable them to manage agronomic practices, but this is not happening due to cashflow constraints,” he said.
The CS also said the government was strengthening its regulatory framework to meet international standards, including through the draft Crops (Pyrethrum) Regulations, 2024. He said Kenya was maintaining access to key markets in the United States and European Union, supported by PPCK’s membership in the Pyrethrum Joint Venture, which helps ensure compliance with U.S. Environmental Protection Agency and European Chemicals Agency requirements.
Kagwe added that PPCK had registered seven pyrethrum-based products for the animal health, public health, agricultural and industrial sectors, and that Special Economic Zones were expected to attract more private processors.
Despite the deep challenges, the CS assured farmers that the government remained committed to stabilising payments and securing the crop’s future. He said the planned lease arrangement would modernise the industry and position it for global competitiveness under a private-sector-driven framework.
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