June 7, 2019

by Lynda Kiernan

UK-based social impact and sub-Saharan-focused investor AgDevCo has announced its first investment in Kenya. In partnership with Root Capital, AgDevCo is investing $5 million in a market-leading consortium of macadamia processors and exporters.

The consortium consists of Sagana Nuts, The Village Nut, Jumbo Nut, and the largest processor of the group, Afrimac – all with processing facilities located in Kenya’s prime macadamia producing central counties.

Founded in 2012, Afrimac has rapidly grown to account for the purchase of more than 5,000 tons of macadamia nuts per year. Kenya is the third largest producer of macadamias in the world after Australia and South Africa, and the Afrimac consortium represents about one-eighth of the country’s industry.

The consortium has built strong relationships, providing seedlings and training to its farmers. All of its nuts are purchased directly in the field and are electronically weighed. This information is then uploaded in real-time, allowing payments to be completed within 24 hours via mobile money.

AgDevCo

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.

“AgDevCo’s ability to provide long-term capital and technical expertise means we are uniquely placed to partner with Africa’s leading entrepreneurs to build a thriving agriculture sector which can trade regionally and with the rest of the world,” said AgDevCo CEO Daniel Hulls last September.

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.

Some recent investments made by AgDevCo include:

~ A $1.1 million investment in the Zambian feedlot business, Ilobezi Limited.

~ A $4.5 million investment in partnership with Saise Farming Enterprises into a seed potato production project in the Northern Province of Zambia.

~ A $1.5 million investment through a debt and equity deal in Malwaian peanut processor Agri-Oils Limited.

~ A $5.05 million investment in Katito Farming Enterprises Ltd. – a key part of the firm’s Northern Zambia Agricultural Hub (NZAH).

~ And an $11.5 million investment in Jacoma Estates – a Malawian farming company specializing in the production of macadamia nuts, chilies, and paprika.

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).

“Responsible commercial agriculture has a major role to play in creating more jobs, increasing trade and reducing poverty in Africa,” said Keith Palmer, chairman and founder of AgDevCo at the time. “We welcome the announcement of the new funding by DFID, which will allow us to build further on the successes achieved by AgDevCo so far.”

Going Nuts

Globally, the macadamia market is expected to grow at a CAGR of 7.5 percent over the 10-year period of 2018-2028, according to Future Market Insights. However, it is the Middle East and African regions that are forecast to reflect the highest consumption volume as well as value over the considered time period.

With such market potential, AgDevCo is not the only recent investor in the Kenyan macadamia industry. In November 2018, Dutch, family-backed impact investment firm DOB Equity made an undisclosed investment in Ten Senses Africa, a Kenyan producer, processor, and trader of certified organic and fair-trade macadamia nuts.

“We expect the growing global demand for health-conscious and natural, organic products to continue over the long-term,” said Brigit van Dijk-van de Rejit, CEO of DOB Equity. “As one of the largest certified organic producers in Kenya, Ten Senses is well-positioned to benefit from these trends.”

-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.