HOW TO TURN KSH.100,000 INTO KSH.5 MILLION IN 4 YEARS.

If you are a patient investor who is willing to risk it all and wait for returns in 5 years or so, then Eucalyptus farming might just be the right business idea for you. Not only is this an opportunity to create some income but an avenue to help the country achieve a 10% tree cover by 2030 as well.

But is there market for these trees or is it just hype as usual? Well, don’t take my word for it. Statistics from the Kenya Forest Service show that Kenya imports Ksh.7 Billion worth of timber from countries like Tanzania every year. Local forests can barely sustain the nation’s demand hence the need for farmers to step in to fill up this gap.

Eucalyptus trees in particular have a wide variety of uses including as: electricity transmission poles, props for construction industry, production of essential menthol oil, timber for furniture and fuel wood for industrial and domestic use.

Demand for mature Eucalyptus trees is very high in most parts of the country and this trend is expected to hold for at least the next 20 years – and herein lies a good investment opportunity for you.

*Eucalyptus Tree Farming Business Idea in Kenya*

*Step 1: Get A Piece of Land*

Eucalyptus trees can grow in almost every part of the country (from Turkana to Central Highlands and Coastal Lowlands). Ideally, you should purchase or lease a minimum of 1 acre piece of land. If leasing, let the lease period be at least 10 years so that you have enough time to utilize the land. An acre of land goes for as little as Ksh.200,000 (purchase) and Ksh.5,000 per year lease.

*Step 2: Prepare It*

You don’t need to till the land but you will need to dig holes in which to plant the trees. Spacing of 1 meter in between holes and rows is recommended (but you can always talk to a forestry expert for more concise advice on this).

*Step 3: Obtain Seedlings*

Only get seedlings from reliable outlets. For starters, you can check with your nearest KEFRI office, they have branches in Muguga, Maseno, Kitui, Nyeri, Londiani, Gede, Kakamega and Turbo. Alternatively you can consult the Kenya Forest Service or any KFS-approved tree nursery in your area. Good seedlings retail at a price range of Ksh.20 – Ksh.30.

An acre piece of land can accommodate up to 3,800 seedlings. But you can always start with as few as 3,000 seedlings.

Note: Different types of Eucalyptus Species Include Grandis, Saligna, Globulus and Regnans. A forestry expert will be able to advice you on which species best suits your region. Generally Grandis is the most popular type in Kenya.

*Step 4: Plant & Wait*

Plant the trees at around the long-rains season and cover with enough soil. Keep animals off the young trees and if possible keep checking every few weeks to see how the farm is faring. The trees are not susceptible to frequent infections; but if you spot any signs of improper growth you will need to either destroy the weak trees or consult an expert.

*Step 5: Market*

Market is readily available with mature unprocessed poles being bought at Ksh.3,500 per piece by processing plants which then sell to electricity suppliers in Kenya, Northern Uganda and Southern Sudan. 

Each processed pole is then sold for Ksh.17,000 per piece. One example of a processing plant that buys eucalyptus directly from farmers is the Millennium Trading House located in Ndenderu, Limuru in Kiambu County.

*Useful Tips*

-Grandis Eucalyptus trees take less than 4 years to reach market maturity.

-A few trees may die or fail to grow properly along the way. 90% success rate would be a good estimation to start with.

-Sometimes you can harvest the trees at only 18 months of age if you have ready market for props and posts (mostly this market comes from real estate constructions). Props go for Ksh.100 per piece.

-Always get KFS certified seedlings. Don’t take shortcuts as you might compromise the quality of your final product.

*How Much To Invest*

You will require about Ksh.150,000 to set up the farm with around 3,000 trees. You can set aside another long-term budget of Ksh.50,000 to cater for other charges that may arise in running the farm. 

So total investment Ksh.200,000.

*How Much To Expect*

If you manage to harvest 3,000 trees at full maturity (which is 4 to 5 years) and sell each unprocessed piece to a processing plant at Ksh.3,500 then you will expect Ksh.10,500,000 in sales revenue. This is largely passive income because you don’t need to spend every day managing the farm once the trees are planted.

*Final Word*

In this world you have to make two choices. The first choice is to work hard for your money and the second choice is to let your money do the hard work for you. 

If you choose the former then your options are quite limited. But if you go for the latter, and think about eucalyptus farming in Kenya seriously, you will realize there’s a lot in store for you in the future.

*Written By*: Timothy Angwenyi

Business Consultant

+254701711058