IFC, FMO to back Tunisian olive oil producer CHO Company with US$14m financing

TUNISIA – One of Tunisia’s largest olive oil producers, CHO Company is eyeing €12 million (US$14.4m) long-term financing facility from the International Finance Corporation (IFC)and Dutch development finance institution FMO.

The proposed debt will finance the company’s permanent working capital and capital expenditures to support its strategy to increase its sales of bottled olive oil.

“CHO’s overall goals through this project are its contribution to preserving linkages with farmers, maintaining jobs, and domestic value addition,” indicates FMO.

The project’s contribution to market resilience will be through building capacity along the supply chain, demonstrating improved business practices to other sector players, and enabling positive spill overs across the sector by maintaining operations during a tumultuous economic period.

ADVERT

CHO was established in 1996 as an olive oil bulk trader in Sfax, Tunisia. It is now one of the largest Tunisian olive oil producers, bottlers and exporters.

It is believed to account for a fifth of Tunisian exports of olive oil and over half of packaged olive oil exports from the North African country.

CHO has vertically integrated operations, from orchards and olive fields to mills, refineries, pomace extraction units, accredited laboratory, production units besides packaging facilities.

Tunisia produced 350,000 tonnes of olive oil in 2019/2020

FAO

It was founded by Abdelaziz Makhloufi, Moncef Rekik and Mohamed Tounsi. The trio still own around 93% stake in the company. The rest is with Sicar Invest, a subsidiary of BNA Bank.

Last month, Compagnie Generale des Industries Alimentaires (COGIA), part of the UAE-based agriculture and food group IFFCO, secured debt funding to support its olive oil procurement and bottling operations in Tunisia.

The company, based in the Tunisian city of Sousse, secured a working capital loan of TND20 million (US$7.16 million) from the European Bank for Reconstruction and Development.

According to FAO, Tunisia broke the record in 2019/20 producing an estimated 350,000 tonnes of olive oil – an increase of around 70,000 tonnes over the 2017/18 campaign.

But the pandemic disrupted agrifood supply chains around the world – from closed markets and movement restrictions, to reduced demand, logistic bottlenecks and weakened access to finance.

ADVERT

Even before the pandemic, there were serious market imbalances for Tunisian olive oil, with drops in both domestic and export prices.

The country’s sector was also at a crossroads – either continue to focus on producing oil in bulk or improve quality and create more added value.

Meanwhile, Mehadrin, Israel’s largest grower and exporter of citrus, fruits and vegetables, has signed an agreement with Morocco to plant its avocados in the North African country.

The company will implement the project in a joint agreement with a Moroccan firm, with both investing MAD 80 million (US$8.9 million) in the first three years of the project.

Mehadrin has over 8,500 hectares of agricultural holdings and boasts annual sales of nearly US$300 million.

Liked this article? Subscribe to Food Business Africa News, our regular email newsletters with the latest news insights from Africa and the World’s food and agro industry. SUBSCRIBE HERE

Related posts

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.