Ghana: Agri-Business Capital Fund signs debt deal with soya processor

The Agri-Business Capital Fund (ABC Fund) has provided a loan of €800,000 to soya milling and aggregation company Dragon Farming Limited, coupled with technical assistance.

Dragon Farming processes raw soya beans into soya bean meal, full-fat soya and soya oil. The business has a processing line with a crushing capacity of about 48 metric tonnes per day and is on a mission to provide innovative and environmentally sustainable products that satisfy the nutritional needs of farmed animals in Ghana and beyond.

Dragon’s vision is to become a leader in the animal nutrition industry and a voice in building poultry and aquaculture industries in Africa. Feed production in Africa increased by 5% in 2019 to 40.6 million metric tonnes, with no country in the region experiencing a decline in overall feed production. This investment by the ABC Fund, which is managed by Bamboo Capital Partners in partnership with Injaro Investments, comes at a time when Ghana and the rest of Africa is responding to the ongoing Covid-19 pandemic.

The loan will enable Dragon Farming to scale up its operations to meet customer demand and increase the volume of soya beans purchased from farmer-based organisations by 40% in 2020 compared to the previous year. This level of production will enable up to 14,000 smallholder farmers to sell raw soya beans to the company. It will reduce the company’s cost of production while increasing its level of profitability. The investment will also allow the company to increase the number of workers it employs, including female workers, due to the increased volume of soya beans to be processed. The ABC funding will help Dragon Farming source soybeans from aggregators supported by AGRA, one of the investors of the ABC Fund, which in turn will improve overall sourcing from smallholder farmers.

In addition to the loan, Dragon Farming will receive technical assistance to further strengthen its strategy, business development and production processes. The technical assistance facility of the ABC Fund is managed by Agriterra.

Jean-Philippe de Schrevel, founder and managing partner of Bamboo Capital Partners commented, “We are pleased to be partnering with a company which has already made great progress in becoming a first-rate soya milling and aggregation player, and we are proud to lend them our support during this challenging time for the country. The ABC Fund loan will enable Dragon Farming to increase market access for smallholder farmers and create more rural jobs. We look forward to working with the team at Dragon Farming to help them execute their vision in the next few months and years.”

Jerry Parkes, CEO of Injaro Investments commented, “The Covid-19 pandemic and its related restrictions are disrupting the supply chains of agribusinesses across the world, including Africa. Such difficulties if layered with lack of access to funding will make it hard, if not impossible, for these agribusinesses and cooperatives to thrive. At the ABC Fund, we believe agribusiness is the backbone of economies and supports many livelihoods across Africa. In times like these, it is imperative that we provide the needed funding to support these livelihoods through sustaining the operations of agribusinesses across the continent. In light of this philosophy, we continue to support businesses and disburse loans during this period whilst carefully mitigating the risks posed by this pandemic.”

The ABC Fund is a blended-finance impact fund which provides catalytic financing to underserved yet profitable segments of agribusiness value chains in developing countries. The ABC Fund deploys loans and equity investments in farmer organisations, rural SMEs and financial institutions.

The ABC Fund was initiated by the International Fund for Agricultural Development (IFAD) in partnership and with funding from the European Union, the Organisation of African, Caribbean and Pacific States (OACPS), the Luxembourg Government and the Alliance for a Green Revolution in Africa (AGRA).

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