Tropical Farms, a subsidiary company of AIM-listed agriculture investment company Agriterra, is talking to investors about raising capital for its Sierra Leone cocoa business.
The company want the capital to develop its outgrower scheme and is approaching development finance institutions for post-Ebola reconstruction capital they have available away from the east coast of the country, which was worst hit by the crisis, managing director Adrian Simpson told Agri Investor.
“I imagine the funding will largely come in the form of long-term debt,” he said. “Cocoa takes a while to grow and our next phase is for 500 hectares of fully irrigated cocoa plantations for our outgrowers. We would like to later increase in 500 hectare chunks expanding to 2,000-3,000 farmers.”
The company is talking to development finance institutions such as the UK’s Department for International Development, CDC, African Development Bank and the International Finance Corporation about its outgrower scheme. The scheme is relatively rare for cocoa producers across parts of Africa, according to Simpson.
West African smallholder farmers supply 74 percent of the world’s cocoa, a situation unchanged since the early 1980s with little to no investment in the countries’ cocoa industry.
“With our own plantation, we hope to create a catalyst and logistics centre of excellence to provide our outgrowers with access to inputs such as fertilisers, education, and a market for their produce at an international price for cocoa,” said Simpson. “Our centre will also be able to ferment the beans to the requirement of each offtaker, and through this whole process we will be able to create our own cocoa organisation to sell onto premium chocolate makers globally.”
Each smallholder farmer will initially have two to three hectares to work on, but these might evolve to become larger holdings, or agribusinesses, run by cooperatives or ambitious farmers, said Simpson. And there is plenty of land to farm, he added.
“The local chieftains, who are custodians of the land that is owned by local villagers, would love for us to turn up tomorrow and set up a plantation on their land because there is no employment outside of the towns,” said Simpson.