CHAPTER ONE: INTRODUCTION

 Background to the Study

The performance of any firm increases the market value of that specific firm but also leads towards the growth of the whole industry which ultimately leads to the overall prosperity of the economy. Most domestic oil processing in Kenya is undertaken by 15 edible oil manufacturing companies (KAM, 2014) accounting for 95% of the manufacturing base of the edible oil industry. Edible oil manufacturing companies are utilizing about 53% of capacity (KAM, 2014). Capacity utilization in the sector is therefore constrained both by the quantity and quality of oil seeds. Capacity utilization of the edible oil sub-sector is by far the lowest among the food manufacturing sector industries and also lower than the average of the Kenya manufacturing industries over the past few years. The edible oil sub-sector has thus diverse and significant constraints (James, 2013). Value chains is very effective way of focusing on measures to improve the intencity and impact of financing. This will include the financing made by smallholder farmers themselves and those made by large-scale domestic or foreign investors. The value chain describes the full range of activities required to bring a product or service from conception, through the different phases of production, delivery to final consumers and final disposal after use (Kaplinsky & Morris, 2001).

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