July 17, 2019

by Lynda Kiernan

UK-based social impact and sub-Saharan-focused investor AgDevCo has announced an unspecified “multi-million Euro” investment in Africado, an avocado grower and marketer located in the Kilimanjaro region of Tanzania. 

Launched in 2007, Africado grows avocados on its own two farms, and sources quality fruit from area farms for export to European markets through its fully traceable supply chain. In addition to its two farms, the company also owns an international standard pack shed, and operates an outgrower scheme involving more than 2,000 farmers. As part of the company’s relationship with its farmer network, it provides extension services such as training on cultivation, harvesting, and storage of avocados, and facilitates the securing of Global GAP certifications.

The company plans to use the funds gained through this investment to support the expansion of its estate operations, its outgrower scheme, and to increase the capacity of its pack shed in order to accommodate greater output from its own farms and its outgrowers.

“AgDevCo’s funding of Africado has enabled Africado to pursue new investment opportunities. In addition to expanding production areas, Africado will introduce new avocado cultivars and expand the outgrower programme,” said James Parsons, CEO, Africado.

Permanent Crop Presence

Registered in 2009, headquartered in London, and with offices across eight African countries, AgDevCo has built a  portfolio of more than 50 investments in production, processing, and distribution companies. The fund began backing projects in 2010 with its first round of loans to six agricultural startups in Mozambique as part of the Beira Agricultural Growth Corridor (BAGC) project.

Over the years, AgDevCo has grown to become one of the most active investors in African agriculture, building its portfolio to include investments in companies across seven African countries that are geared toward an increase in sustainability, agricultural output, incomes, and a reduction of poverty.

In September of last year the fund announced that it had secured a further £55 million (US$71 million) from the British government’s Department for International Development (DFID). And this investment in Africado is the second investment linked with permanent crops announced by AgDevCo in as many months. In early June the firm announced its first investment in Kenya, partnering with Root Capital to commit $5 million in a market-leading consortium of macadamia processors and exporters. 

A Pioneer

Africado is one of the pioneers of avocado production in Tanzania, and the first in the country to export its crops to foreign markets. 

Once a big coffee-producing country, price volatility, mismanagement in the field, and nationalization in the 1970s saw the industry’s collapse. Today, Tanzania’s high-altitude slopes surrounding Kilimanjaro grow avocados.

Last year Africado exported 3,000 tons, or half of the total avocado production for the whole country, to the EU. With funding from Finland’s and Norway’s development funds, along with capital from AgDevCo, the company’s founder James Parsons has a goal of doubling exports to more than 6,000 tons. 

The company launched its successful outgrower scheme in 2010, selling seedlings from its farm to contracted growers who, once trained, would then sell their crop back to Africado. Now, after nine years, the company is engaged with thousands of smallholders across a 200-kilometer radius.

“Now everyone wants to grow avocados and local people have even started eating them,” Festus Nkuru, smallholder manager for Africado, told The Independent. 

“We are pleased to support Africado’s continued expansion,” said Sean Carey, associate director at AgDevCo. “The direct benefits for the local community are clear to see. We believe the company will help drive the development of a viable avocado industry in Tanzania, helping create jobs and bringing in export revenues.”

– Lynda Kiernan is Editor with GAI Media and daily contributor to GAI News. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@globalaginvesting.com.