December 12, 2023

By Lynda Kiernan-Stone, Global AgInvesting Media

Africa-focused ag investor specialist AgDevCo has invested $10 million in Dowson Limitada, a primary agriculture producer of macadamias and avocados in Mozambique. 

With a current portfolio of $183 million of committed funds in 41 companies, UK-based AgDevCo explained that its vision is a thriving commercial agriculture sector benefiting both people and the planet. Contributing toward this realization, AgDevCo invests in and supports agribusinesses as they grow toward climate sustainability and, where possible, regenerative solutions. 

Joining its portfolio is Dowson. Established in 2012 by a group of South African farmers who recognized the optimal growing conditions in central Mozambique, the company now has 270 hectares of macadamia orchards and 174 hectares of avocado orchards under irrigation. The company stated that this investment from AgDevCo will enable it to expand production to 1,000 hectares over the course of the next five years. 

“We are pleased to be partnering with Dowson to make this major investment in the Mozambique macadamia and avocado industry, which will help open new export markets,” said Kirk Lynch, senior investment manager and project lead, AgDevCo. “We have been impressed by Dowson’s management and the use of technology to optimize productivity on the farms. The expansion will drive rural job creation and skills development.”

Two Focus Crops

Among AgDevCo’s diverse portfolio, avocados and macadamias have been two crops of focus. Earlier this year in April, the investor committed $8 million in mezzanine funding to an avocado venture in Kenya in partnership with Agris, the agriculture and forestry division of investment company Maris, and Granot, a leading avocado producer from Israel.  

Together, the partners aim to develop a 390-hectare (964-acre) avocado plantation at Agris’ flagship Ndabibi farm in Naivasha, Kenya. The combined approach will leverage Granot’s expertise gained through being one of the world’s largest avocado producers, with Agris’ local knowledge and portfolio of agricultural and forestry businesses spanning East Africa.

Other prior investments include an unspecified “multi-million Euro” investment in Africado, an avocado grower and marketer located in the Kilimanjaro region of Tanzania; a $5 million investment made in partnership with Root Capital in a market-leading consortium of macadamia processors and exporters in Kenya – both executed in mid-2019; and an $11.5 million investment made in Jacoma Estates, a Malawian farming company specializing in the production of macadamia nuts, chilies, and paprika, made in 2017. 

AgDevCo is also an early investor, taking a 25 percent stake in Westfalia Fruto in 2014, providing greenfield financing for the development of Zembe Estate to grow avocados in Manica Province, Mozambique. Upon the success of this operation, AgDevCo made a follow-on investment for an expansion at a second farm located on Catandica and for packhouse upgrades. 

In recent years, Mozambique’s avocado industry has grown from a fledgling endeavor to exporting 6.5 million pounds in 2022, representing year-on-year growth of 154 percent. 

And as the sector matures, in September 2023, Westfalia fruit announced the expansion of its packing facilities in the country through a project that is expected to be completed in February 2024. 

When considering macadamias, Mozambique is on a high-potential path. In 2021, national nut-in-shell production was estimated to be 1,500-2,000 tons, mainly being exported to South Africa or China. More recently, the 1,300-hectare Niassa Macadamia Province is under development, with estimated output reaching 20,000 tons per year by 2035. 

For Dowson, the influx of capital and the structure of the investment are both beneficial. Not only will the company have the dry powder to expand just as the sectors in the country gain greater traction, but the timing of the debt servicing also works in their favor. 

“We are grateful to be concluding the AgDevCo financing,” said Jack Brotherton, co-founder and CEO, Dowson. “The structured financing allows Dowson to achieve its expansion goals in both macadamias as well as avocados, whilst allowing for the trees to mature before any debt servicing is required. We are looking forward to a long and mutually beneficial relationship with AgDevCo.”

~ Lynda Kiernan-Stone is editor in chief 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 Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

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