Established in 2011, Kunifira Agro Processing (KUNAP) produces integrated agro-processed products such as edible soya oil and soya meal using mechanical pressing technology, with a capacity of 2 tons per hour (TPH) for extrusion and 4 to 7 TPH for various animal feeds. The main raw materials used by the company are soybean, maize, and other processed agricultural products. At full capacity, the annual consumption of soybean and maize is 13,440 MT and 19,220 MT, respectively.

With 100 employees (30% women), KUNAP boasts a high level of expertise, management, and leadership and is highly motivated to scale up its operations. The company plans to triple its consumption as it expands. To secure the necessary raw materials and ensure sustainable market opportunities for smallholder soybean farmers, KUNAP engages in contract farming agreements with two cooperative unions and provides demand-based technical assistance to producers, helping them improve their adaptive capacity and resilience to climate change.

Operating from Gelan town in the Oromia region, KUNAP sources more than 50% of its soybean demand from smallholder farmers, reaching more than 15,000 individual producers (30% women) through cooperative unions. Over the next three years, it plans to grow the supply of raw materials from individual producers to more than 80%. Contact: Ato Kumssa Shanko, CEO, kunifira2011@gmail.com

Contract Farming between Kunifira and Soybean Smallholders and/or Cooperatives for Reliable Markets and Climate Smart Soybean Seed Multiplication

This project demonstrates that improved access to enhanced seeds to boost soybean production can facilitate the expansion of a contract farming business model by other large-scale processors in the country.

The 11-month project (February to December 2024) aims to address bottlenecks in the soybean value chain and supply linkages with smallholder farmers and farmers’ cooperative unions by strengthening climate-smart contract farming models and direct raw material sourcing in CASA intervention zones. KUNAP established a contract farming model involving seed multiplication with smallholders through two farmer cooperative unions, with strong support from the local administration and other organizations. The model started as a pilot and will scale up annually, increasing the number of farmers and the volume of soybean production and supply. The contract farming partnerships with the unions will provide market access with stable prices, supply of quality seeds, and provision of technical support, including capacity building on cooperative management and quality collection of products.

Besides securing raw material supply for itself and reliable markets for producer farmers, the company will support the multiplication of drought-tolerant and disease-resistant soybean seed varieties. It will also facilitate access to improved seeds, rhizobium (bio-fertilizer), agribusiness training, technical advisory services (extension services), technical backstopping, access to finance through micro-finance institutions, and other resources that will contribute to enhanced production and productivity of smallholder farmers. KUNAP initially contracted 138 and later increased the number to 1,600 soybean growers in Buno Bedele Zone, Oromia region of Ethiopia.

The project aims to provide 3,600 smallholder farmers with access to quality seeds, rhizobium inoculant, training, and extension services, as well as technical production skills through climate-smart contract farming agreements with KUNAP. In the first year, 1,600 smallholders (including at least 40% women, both in female-headed and male-headed households) will be engaged through contract farming agreements. In the following year, the project will scale up to reach 3,600 farmers (an additional 2,000 smallholders) to secure a sustainable supply of soybeans, ensuring the required quality and quantity for edible oil and soya cake production. The farmers will benefit from soyabean sales with net additional annual income of £100.

Of the total project cost of £132,520, the CASA contribution for technical assistance and a grant is £51,075.

With support from CASA, Kunifira will compile climate-smart best practices and share experiences for scale-up in other woredas (districts) and regions to contribute to higher production. CASA will provide technical assistance related to business plan development and linkages with different sources of finance, enabling Kunifira to secure additional funding from investors to expand and diversify its existing products and introduce new ones, such as corn-soya blend.

In addition to edible oil production, KUNAP has started producing soya meal to enrich bread flour, baby food, snacks, and animal feed using the by-product of the oil extrusion process. Catering to market demands and specific customer needs, KUNAP offers various animal feeds formulated to enhance animal health, productivity, and the quality of meat, milk, and eggs.

The company’s expansion program integrates new products through innovation, dedicating substantial resources to research and development. KUNAP is growing and has already set up two processing facilities: edible oil and feed processing. A corn-soya blending factory is also being established. Plans for super cereal or super cereal plus, wheat flour, maize flour, and corn-soy blended baby food are also being completed.