The Swiss ag and food-focused private equity unit managed by responsAbility Investments AG has made a strategic investment in Suminter, a leading global organic and non-GMO supply chain management company.
Although financial details of the investment were not disclosed, responsAbility usually invests between $5 million and $25 million in mid-stage, unlisted companies in emerging economies, and through this deal, secured a minority stake in Suminter.
Founded in 2004 in Mumbai, India, Suminter is a rapidly growing and globally leading supply chain company that concentrates on 100 percent organic and non-GMO spices, herbs, cocoa, virgin coconut oil, vanilla, sugar, cereals, pulses, animal feed (soy), and cotton.
“We, at Suminter, believe in a triple-bottom line approach to create lasting impacts in society resulting in social and economic growth of farmer communities whom we work with, environmental benefits by promoting chemical-free farming and ensuring that our customers receive a highly nutritious & chemical-free product,” said Sameer Mehra, founder and promoter of Suminter.
The company’s inclusive business model connects smallholder farmers with global markets, and currently works with a network of nearly 50,000 certified producers, helping them secure organic certification and training them in sustainable, organic production practices with the goal of raising yields and quality. With sourcing and processing operations spread across Asia and Africa, the company has a customer base that touches 20 countries on four continents, including the U.S. and Europe.
Through its business, the company posted revenue for 2016-17 of Rs 528 cr (US$80 million), up from Rs 334 cr (US$50 million) the year before, reports VCCircle. While its net profit tripled from Rs 14.4 cr (US$2.1 million) to Rs 43.7 cr (US$6.5 million).
“Agriculture and Food is one of the core sectors for responsAbility globally,” explained Rik Vyverman, head of agriculture equity investments with the firm. “We are excited to back a leading organic products player backed by a driven and capable management team and featuring an inclusive business model that integrates smallholder farmers into global supply chains. Combining double-digit growth rates with tangible development impact, Suminter exactly fits the profile of portfolio companies we are looking for in private equity investments in the agriculture and food sector.”
Suminter, which sources its products from more than 110,000 hectares of agricultural land, plans to earmark the capital gained from this investment to drive expansion, and to meet working capital requirements.
Given consumer trends that have generated expectations of the global organic food market reaching a value of US$321 billion by 2025, reflecting a 10-year CAGR of 13 percent, the category is booming. However, the extended time period and high cost involved with converting traditional farmland to organic is widely prohibitive, especially in emerging markets. This funding for Suminter will help bridge those challenges.
“We are very excited to have responsAbility join us in this initiative,” said Mehra. “Their team, led by Rik Vyverman and Akshay Dua, share our vision for a sustainable future, and we are excited to have their support and guidance as we work towards it.”
-Lynda Kiernan