On March 7, 2017, Malawi saw opening of its first margarine and baking fat processing plant at Kanengo in Lilongwe to produce a long-life fridge-free margarine called Sunspread. The plant is one of the fruits of UNDP’s Malawi Innovation Challenge Fund (MICF), funded by UK’s Department for International Development (DfID), which provides matching-grants for innovative and inclusive business projects by private sector companies operating in Malawi.
Before opening of the manufacturing facility, Malawi was a net importer of all its margarine and baking fat and with most of the country’s population living in rural areas where access to electricity is limited, it was difficult for most Malawians to keep highly perishable margarine products. The new margarine product will therefore have a huge impact on the import bill and is also deemed being the appropriate product to reach rural communities as it needs no refrigeration.
The plant, which will require 14,000 metric tons of sunflower seed every year, has expanded market access for over 10,000 rural smallholder farmers, further improving their livelihoods. For example, in 2016, the first group of 3,250 farmers supplied 2,500 metric tons of sunflower seed to the plant at an average price of MK 220 per kg compared to MK125 per kg on other markets and in 2017 farmers are expected to supply 8,000 metric tons of sunflower to the factory.
Sunseed Oil Managing Director, Wassim Kassam, said: “Over 10,000 smallholder farmers are integral part of the supply chain and we will create 100 new jobs at the production facility by the end of the project in 2017, of which more than 30 have already been created. The 10,000 smallholder farmers will supply 40 percent of the required raw materials for the factory, to start with.” Moreover, additional 180 jobs are being created at the Technical Support Centers.
One of the farmers from Kasungu district who sold his sunflower produce to the plant last year, Komani Gondwe, said the plant has encouraged him to increase his sunflower production from four hectares last year to 11 hectares this year, saying the first proceeds from his sunflower sales to the plant have enabled him pay school fees for his two children who are at a university and meet his other livelihood needs.
The Sunseed project falls under MICF’s agriculture challenge window that was conceived to encourage production of new products, services and business models that will increase the supply of processed and semi-processed agricultural commodities manufactured in Malawi to help substitute some of the imported products on Malawi market and to increase exports.
UNDP Deputy Resident Representative (Programme) Claire Medina said: “The design of the MICF has been guided by the principles of the National Export Strategy (NES) that provides a clear roadmap for diversifying Malawi’s economy, a shift towards an exporting and producing nation from an importing and consuming nation.”
MICF is currently supporting several investment projects aimed at stimulating private sector development and improving economic growth to ensure increased incomes and employment opportunities Malawians. Other partners to the MICF include the International Fund for Agricultural Development (IFAD) and the German Development Bank (KfW).