LONDON, June 12, 2014 /PRNewswire/ --
AgDevCo is delighted to announce a USD1.5 million investment in Rungwe Avocado Company (RAC), an avocado growing and export business based in the Rungwe region of southwest Tanzania.
(Logo: http://photos.prnewswire.com/prnh/20140612/690966 )
RAC has been a pioneer in the development of Tanzania's horticulture industry. In 2009, it was the first ever farming business to trial avocado exports by air freight to European markets. Today RAC is establishing refrigerated sea shipment routes to Europe and beyond - another important breakthrough for the industry.
The business is helping to improve the living standards of local farmers. RAC engages over 3,000 smallholders as part of its outgrower network. Farmers receive inputs and training as well as a fair price for their production. By 2018, 75% of the avocados sold by RAC are expected to be grown by local farmers, resulting in some USD0.8 million being paid annually into the local community.
RAC is set to receive a USD1.2 million loan from AgDevCo with another USD0.3 million invested in the form of equity. The investment will support the installation of a micro jet irrigation system on the farm to boost yield performance. It will also fund ongoing operations, including management of the outgrower scheme.
AgDevCo is providing risk capital and technical advice to a range of small and medium-sized agricultural enterprises in Africa. Daniel Hulls, AgDevCo's CEO, said:
"We believe that by helping socially responsible businesses like RAC to access international markets we can contribute to the modernisation of the agriculture sector and help deliver better incomes for thousands of smallholder farmers."
AgDevCo is a social impact investor operating in the agriculture sector in Sub-Saharan Africa. We increase prosperity and opportunity in rural Africa and contribute to greater food security and better health outcomes.
AgDevCo invests patient capital in partnership with small and medium-sized agri-businesses and smallholder farmers to drive their growth, sustainability and impact.
Patient capital is invested on sub-commercial terms in early stage ventures that have potential to be sustainable and profitable but cannot access finance from others because the costs and risks are too high. We ensure that there are major benefits for smallholder farmers and the rural communities in which they live.
As a not-for-profit distribution company, AgDevCo withdraws its capital once businesses are well-established and re-invests it in developing new early-stage agri-businesses.
Chris Isaac, Director of Business Development