September 15, 2021

By Lynda Kiernan-Stone, Global AgInvesting Media

With uses that span not only the food sector, but also the health and beauty and pharmaceutical industries as well, the global spice market is a multibillion dollar industry.

In 2019 the global spice market was valued at $13.77 billion, according to grandviewresearch.com, which estimates that this value will climb at a CAGR of 6.3 percent between 2020-2027.

Most countries across Africa are involved in spice production, however, what is produced is usually consumed domestically, or even regionally. But Agricorp International (Agricorp) has its eye on export markets. 

To help realize this vision, the company closed on a $17.5 million Series A raised from Vami Nigeria, which led the round committing $11.5 million, and One Capital LLC, and AFEX, which both contributed working capital financing for the company. 

Founded in 2018 by Kenneth Obiajulu and Wale Omotimirin in Lagos, Nigeria, Agricorp aims to be the bold company that launches Nigeria onto the global export map by leveraging secured capital to build simple processing systems for spices and other agro products.

Like ginger, for example. Right now, India and China dominate the world’s ginger trade. But, Nigeria is the world’s fourth largest grower with yearly estimated production of 31 million tons. Demand, however, stands at 65 million tons, leaving a supply gap of 34 million tons. And while Nigeria accounts for more than 16 percent of the world’s ginger supply, it currently holds less than a 4 percent share of the export market. 

Florence Edwards, national president, Ginger Growers, Processors, and Marketers Association, Nigeria recently told CUA Africa, “Globally, people are now consuming more ginger and other herbs due to the pandemic to boost their immunity”, adding “as a result, Nigeria is seeing a surge in demand for its ginger since we have the spiciest variety globally.”

With the capital raised through this round, Agricorp plans to increase its processing capacity to 7,000 metric tons in order to achieve the scale necessary to gain not only a greater presence on the global stage, but to boost domestic GDP from agriculture.

“We led the round because we saw a clear growth path, strong social impact, excellent financial trajectory, and global collaborations with key partners,” said lead investor Vami Nigeria. “Most importantly, the depth of knowledge, passion, and resilience of the team is unrivaled.”

Kenneth Obiajulu, CEO, Agricorp commented, “We believe that by increasing our capacity to 7,000MT, we will maximise the potential to boost Nigeria’s forex earnings through export, contribute our quota to improving the Nigerian GDP from agriculture, and serve as a worthy model to African youths who aspire to be agribusiness owners. We want to show them it is possible and very rewarding as well.”

With expectations that the global spice market will be valued at $20.99 billion as soon as 2024, the potential for growth is substantial. One channel that may help Agrocorp realize its goal is the African Growth and Opportunity Act (AGOA) – legislation passed by the U.S. Congress in May 2000, and which was extended beyond its initial 15-year term to 2025. 

Professor Haruna Dikko Ibrahim, director-general Raw Material Research and Development Council (RMRDC) Abuja, explained in an interview on AGOA.info, that this legislation, which was created to boost the economies of sub-Saharan Africa and to improve relations between the region and the U.S., helped triple Nigeria’s agricultural exports to the U.S. from about $3 million to $9 million in 2017, and can still be leveraged to gain overseas market share. 

– Lynda Kiernan-Stone is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Oilseed & Grain News. She can be reached at lkiernan-stone@globalaginvesting.com.