UGANDA – Pura Organic Agro Tech Ltd, an agro-processing company focused on the cassava value chain in Uganda, has clinched a US$2.5 million straight equity and patient debt investment from Yield Fund, managed by Pearl Capital Partners.
The investment will enable Pura acquire and install a vertically integrated cassava processing plant that is envisaged to produce an assorted line of three products comprising of: High-Quality Cassava Flour (HQCF), Tapioca starch, and Sago (an edible starch delicacy that is made from cassava).
Pura which was incorporated in 2011, is seeking to expand its operations into cassava processing and value addition.
Over the past few years, the company has been developing its nucleus farm, expanding the acreage cover of its cassava portfolio, producing cassava cuttings for smallholder farmers.
Mr. Wanjohi Ndagu – Partner at Pearl Capital Partners said, “We are honoured to work with Pura to boost cassava value addition and achieve Uganda’s import substitution industrialization strategy.
“The investment not only presents an opportunity to provide sustainable solutions to key challenges faced by cassava farmers but also to attain Uganda’s lofty development goal of decreasing her dependence on agro-processed imports.”
Alongside Yield Fund’s investment, Pura has successfully obtained a Business Development Support (BDS) matching grant facility of US$ 225,250 managed by the International Fund for Agricultural Development (IFAD) to enhance both the technical and governance facets of the business as well as develop a cassava out-grower scheme, which will guarantee the company’s cassava supply to the new processing plant.
“The investment not only presents an opportunity to provide sustainable solutions to key challenges faced by cassava farmers but also to attain Uganda’s lofty development goal of decreasing her dependence on agro-processed imports.”Mr. Wanjohi Ndagu – Partner at Pearl Capital Partners
“Pura’s addition to Yield Fund’s portfolio enhances the diversity of the Fund, as the company focuses on a staple, food secure and nutritious crop – cassava.
“The domino effect of this investment for rural smallholders will be tremendous and through the BDS facility, IFAD will support Pura in achieving a smallholder inclusive business model,” said Lakshmi Moola, the IFAD Country Director for Uganda.
Pura is expected to yield a high social impact derived from the supply chain, where the company will source most of its raw material i.e., fresh cassava roots from a combination of the smallholder farmers and the commercial cassava farmers.
The supply model is positioned to provide the subsistence cassava farmers with a sustainable market for their cassava produce and consequently an opportunity to commercialize cassava as a cash crop as well as increase their household incomes in the process.
Mr. Ramesh Babu founder of Pura Organic said, “I want to thank PCP/ Yield Fund for supporting Pura to establish this cassava processing unit, which is a valuable addition to farmers. This investment brings in multiple benefits to all stakeholders and the country at large. My dream is to see at least another 50 similar processing units in a couple of years.”
Mr Ramesh further revealed that the company is eyeing the export market especially India with its Sago product, which is a delicacy in the nation.
The backing marks Yield Fund’s eighth investment into the Ugandan agriculture sector but more uniquely, the first substantial value addition investment into the cassava value chain. Earlier last year, the investor dished out UGX 4.6bn (US$ 1.2m) to NASECO, Ugandan
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