One Earth Foods Investments (OEF), a Cambodian company developing the country’s first state-of-the-art coconut plantation, has launched a $5 million Series A round to kick-start its plans to grow, market and sell premium coconut products and tap into the $40 billion global coconut market.
OEF is headed by David Clifton, the founder of Stevia One, the world’s largest and most productive stevia plantation project. Clifton says he wants to capitalise on the supply and demand dynamic that the rapid growth in the market for coconut-based projects has created.
“There has been a wave of new demand for coconut water which has brought large players like Coca-Cola, Pepsi, and Red Bull into the market. (But) the supply of new coconuts has been stagnant. This has created a simple and advantageous supply and demand opportunity,” he told Agri Investor.
Clifton said that 85 percent of all coconuts are grown in South East Asia but that the majority were planted in the mid-1940s. “Since then, there have been no replanting programmes.”
OEF aims to raise $5 million initially, which would be used to acquire the land, buy the equipment and install the plantation, including employing engineers and agro-scientists. OEF has identified a 210 hectare piece of land and tested it for viability.
Clifton said the company “wants a strong partner and investor that can add value and has long-term views”, with the goal of developing “a vertically integrated company and a world-class Cambodian product”. OEF is ultimately targeting $50 million of investment to scale up capacity and expand operations across South-east Asia.
The low cost of land and ease of doing business makes Cambodia an attractive location to establish the project, he said. “Compared to its neighbouring coconut producing countries, large tracts of cheap land are readily-available, along with a low-cost labour force. (In Cambodia) you can set up a 100 percent foreign-owned companies and there are no capital controls.”
Clifton also pointed to the export opportunity as a compelling feature of doing business from the country. “Another competitive advantage is that you can have duty free exports to the EU, China and North America.”
OEF would focus on producing a range of coconut products, including oil, water, flour and briquettes. Clifton said the plantation would be organic, Fairtrade and Rainforest Alliance Certified “because of the value international markets put on these certifications”.
The company is forecasting revenues of $2.3 million in the second year, growing to $18 million in year five following the 1000 hectare expansion planned in year four.