IDH, Unilever and Dalberg partnership develop local African agricultural SMEs to meet market demand for food ingredients

At the September 2019 African Green Revolution Forum (AGRF) a world premium and impactful forum for African agriculture development IDH, Dalberg and Unilever announced a strategic partnership. IDH and Dalberg will support Unilever to develop and increase its supply base in Africa – Grown Sustainably in Africa (GSA) –will incorporate local farmers and SMEs into Unilever’s supply chain. The initiative seeks to commercialize and improve business operations of emerging suppliers of Unilever across several countries. This will, in turn, improve livelihoods and contribute to the broader agricultural transformation, by increasing intra Africa trade and job creation on the continent.

At the forum, Mr. Christian Byron – Vice President, Head of Supply Chain, Manufacturing and Plantations Africa shared Unilever’s sourcing commitment of $25M and to support identified SME’s meet their quality and volume requirements in the next three years. Mr. Byron also revealed a recent diagnostic and analyses of current business operations of these SME’s, done by IDH and Dalberg. The results of this diagnosis are used by the SME’s to make technical, business and investment plans that help them produce at the right price and quality to meet Unilever’s real sourcing needs.

One such SME and potential supplier of Unilever is Wensleydale, producing fresh and dehydrated organic vegetables in South Africa. Unilever is interested in sourcing dehydrated vegetables from Wensleydale, however their currently production capacity is far under Unilever’s needs. To kickstart this project, IDH conducted a technical due diligence, revealing the technical capacity and investment needed, optimal staff allocation and desired capacity development for management. Once the plan for improvement was developed, the GSA released a call for tender to support Wensleydale in building capacity to meet Unilever’s requirements and quantity needs. After demonstrating successful growth, Unilever will sign a legally binding contract that offers long term offtake of dehydrated products from Wensleydale. IDH is providing co-financing for the capacity development of Wensleydale’s operations as well as for the initial implementation of the project.

In addition to the IDH grant contribution to the SME’s under GSA initiative, The IDH Farmfit Fund is able to provide financial investment to these SME’s in the form of debt, equity or guarantees where banks are unwilling to fund or where the cost of funding is too high. The funding can be used to finance production assets, fixed assets, working capital (long and short term), and long-term finance for renovation and rehabilitation. Where internal lines of funding are used or where capital is not required, the Farmfit Fund is able to provide de-risking tools to either producers, local financial institutions or Unilever subsidiaries. This allows producers, local financial institutions or Unilever’s subsidiaries to reduce their risk and expand the scope of their lending.

The GSA initiative is part of Unilever’s goal to localize the production of food ingredients, connect with 1000’s of farmers and develop 1000’s of permanent jobs in Africa.

For more information on this initiative and how IDH can support your business in growing its supply base in Africa contact:

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