UGANDA – Yield Uganda Investment Fund, an agribusiness impact vehicle managed by Pearl Capital Partners has partnered with FCA Investments to issues €1.3 million (US$1.54 million) backing to Uganda’s AMFRI Farms Ltd.
The AMFRI Farms is a pioneering organic farming, processing and exporting company of certified fruits and vegetables, herbs, spices, cereals, food additives and colourants.
The company works closely with diverse communities all over Uganda, in training and production of certified organic produce.
According to reports by Daily Monitor, the financing is partially structured as convertible preference shares, 60 per is convertible into equity.
As part of this investment, the International Fund for Agriculture (IFAD) has made available a Business Development Support (BDS) grant, that will among other interventions, notably improve business operations, particularly digitized traceability in pursuit of Global “Farm to Fork” safety standards and significantly enhance the network of smallholder farmers working with the company.
The capital injection is aimed to help AMFRI Farms expand production both at the nucleus estate and among the network of certified organic smallholder farmers, increase its processing capacity and improve access to a wider organic food market.
Dr. Edward Isingoma, Managing Partner – Pearl Capital Partners (PCP) said, “AMFRI Farms is a unique company in the Yield Fund’s portfolio of companies.
“The business practices promoted by AMFRI Farms to grow the production and marketing of Certified Organic products, in Uganda, create a strong value proposition for Uganda’s agriculture, especially the network of the smallholder farmers that supply the company.”
AMFRI set to expand operations
AMFRI Farms started its journey in Luwero in 1998, at the company’s Kyampisi Estate, producing more than 50 different products and houses a training centre for smallholder farmers.
The company also operates production farms, experimental and rural poverty alleviation projects across five locations that include Nakaseke, Masaka, Mubende, Buikwe, Zombo, and Semuto.
AMFRI’s 1,500 acre farm in Nakaseke District became the first plantation in Sub Saharan Africa to attain biodynamic, demeter certification in 2009 and remains the only major farm to have such a certification in the entire equatorial belt.
The demeter certification, regarded as the pinnacle of organic certification is used in more than 50 countries to verify that biodynamic products meet and exceed international standards in soil and water conservation and sustainable, climatesmart production and processing.
Other than having its own farms, the company works with smallholder farmers in eight districts, including Arua, Pakwach, Luweero, Kayunga, Budaka, Kamuli, Masaka, Mpigi, Mubende, Lwengo, and Rakai.
According to Mr Nazim Shivji, Managing Director of the entity, the support will enable Amfri to increase the number of certified out grower farmers to 5,000 from the current 700 farmers.
The investment is also expected to wheel forward AMFRI’s expansion drive into value addition for a new line of products including IQF (Individually Quick Frozen) machines which should help decrease seasonal and post-harvest losses significantly.
The farm currently exports between two to five tonnes of fresh fruit exports weekly depending on the season but anticipates this to increase to 17 tonnes per week over the coming year.
Its major export destinations include Germany, Netherlands, Denmark, France, and other EU countries as well as Dubai. Gourmet, extraction grade and powdered Vanilla and dry fruit exports are shipped primarily to Canada and the United States.
A significant proportion of the investment, according to Shivji will handle the installation of modern irrigation systems, to move away from reliance on rain-fed agriculture, and counter the vagaries of climate change.
“It is an honour and unique privilege for AMFRI Farms to be selected as one of the portfolio investees in the Yield Fund’s and FCAI’s exceptional holdings.
“The timing of the investment, coming at what is generally regarded as uncertain and exceptionally economically challenging, merely affirms AMFRI’s immense confidence in our fellow stakeholders’ long term and ethical outlook in making impact investments,” said Shivji.
This is the second deal by the Yield Uganda Investment Fund within a month. It had committedUS $2.5 million to Pura Organic Agro Tech Ltd, a Ugandan company set up by an Indian-origin entrepreneur, in early August.
Pura Organic, focused on the cassava value chain will use the investment to 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).