Export Processing Zones Authority Kenya Issues New Guidelines on Essential Oils Processing

Global demand for natural and essential oils offers additional investment opportunities in the EPZ Robust growth in food and beverage, personal care and cosmetics, and aromatherapy end-use industries has translated into increased global demand for natural and other essential oils. It is this demand that has contributed to an increase in the number of EPZ companies that are engaged and seeking to set up processing plants of natural and essential oils extracted from roots, flowers, leaves, fruit, seeds or bark of a variety of plants through processes such as pressing or distillation. According to market analysis research, the global essential oils market size was valued at USD 21.79 billion in 2022 and is anticipated to expand at a compound annual growth rate of 7.9% from 2023 to 2030. Of the 154 EPZ enterprises engaged in different EPZ-eligible export–oriented activities countrywide, more than ten are in vegetable and essential oils processing while up to five have expressed interest to set up in the EPZ Program. Kenya’s leading products include extra virgin essential oils, such as coconut, avocado, macadamia, sesame, baobab, olive black pepper, eucalyptus, neem, lemon grass and moringa oils amongst others. These products provide investment opportunities in the EPZ Program. At the same time, the sourcing of some of these raw materials from local farmers promotes backward and forward linkages – a key objective of the EPZ Program. Europe is the world’s biggest importer of the oils mainly France, Germany, and the UK. Seven additional EPZs gazetted in April and May 2023 The total number of EPZs countrywide has risen to 89 from 86 following the gazettement of seven additional zones by Hon. Moses Kuria, Cabinet Secretary, Ministry of Investments, Trade and Industry (MITI) in April and May 2023. Three of the new EPZs are categorised as public zones while four are private zones located in Mombasa, Kilifi and Kwale counties. Busia, Uasin Gishu and Kirinyaga EPZs public zones have been established under the EPZ Flagship Manufacturing Hubs that MITI, in collaboration with the county governments, is advancing to replicate the EPZ Athi River model to attract new export–oriented investments and create more employment in the counties. Other counties earmarked for the EPZ expansion are Kiambu and Nakuru. “…The government has stepped up the establishment of five additional export zones in the coming financial year to complement the one in Athi River,’ H.E President Dr. William Ruto announced during his Madaraka Day 2023 speech. Present in 22 counties, the EPZ program remains a tool for regional development, job creation and the general development and growth of the area surrounding the zones in their respective geographic locations once the necessary industrial infrastructure; power, water, sewerage, and telecommunications is put in place. Uasin Gishu and Kirinyaga EPZs have further pushed the number of EPZs available in these counties to two each. The Nasewa zone is the first EPZ in Busia County. EPZs are designated parts that are aimed at promoting and facilitating export-oriented investments and developing an enabling environment for such investments. EPZs are either categorised as public or private zones. Public EPZs are managed by EPZA.