Unga Group MD Joseph Choge unpacks company’s half-year performance

Unge Group Limited has recently announced its 2024 interim results for the half-year ending December 2023, showcasing a notable 3 per cent revenue increase despite global inflationary pressures and changing consumer preferences. In a recent CNBC Africa interview, Unge Group's Managing Director, Joseph Choge, delved into the driving factors behind this growth and shed light on the company's strategic initiatives. Choge highlighted that the primary driver of the revenue growth was the animal nutrition division, which saw a surge in demand. Conversely, the human nutrition division experienced a decline in volumes due to elevated commodity prices, leading to reduced consumer appetite. Choge emphasized the stability in egg prices within Kenya, which bolstered the poultry sector and contributed significantly to Unge Group's overall revenue growth. Looking ahead, Choge expressed optimism that the positive performance of the animal nutrition segment would continue to drive growth in the second half of the financial year, while also expecting a rebound in the human nutrition segment. Additionally, Choge addressed the impact of Kenya's inflationary environment on Unge Group's pricing strategies. He noted that the company's core product, Ugali, reflected fluctuations in inflation, with price adjustments being necessary to navigate the challenging market conditions. However, he highlighted a recent decrease in maize prices due to increased grain supply, resulting in a drop in Ugali prices, which bodes well for consumers. Moreover, Choge elaborated on the cost-cutting measures and operational efficiencies implemented by Unge Group to enhance its financial performance. The company's focus on restructuring and sustainable practices such as solar energy utilization has led to improved operating profits and cost savings. Choge also touched on the impact of the company's performance on its stock price, mentioning a recent upward trend following positive financial results. Despite facing forex losses due to currency fluctuations, Choge expressed confidence in the strengthening of the Kenyan shilling and its potential to positively influence Unge Group's financial outlook and share price movement on the stock exchange. Discussing future projects and partnerships, Choge highlighted Unge Group's collaboration with Nutreco in Tunga Nutrition, aiming to bolster animal feed production and revenue streams. He also mentioned ongoing research initiatives with the University of Eldorado to develop local seed varieties and off-taking agreements with Homa Bay County to promote soybean cultivation for feed production. The revitalization of existing product lines and the successful relaunch of the Amana brand, featuring rice, pulses, and sugar products, has contributed to volume growth in the human nutrition segment. In closing, Choge shared his economic outlook for the price of Ugali, expressing optimism in the government's efforts to support farmers through input subsidies and favorable weather conditions. He highlighted the importance of achieving food security and fostering lower food prices for consumers by promoting agricultural sustainability. Choge's insights underscored Unge Group's commitment to innovation, operational excellence, and strategic partnerships to drive growth and deliver value to its stakeholders.