South Africa’s largest pharmaceutical manufacturer, Aspen Pharmacare, may have announced a relatively tepid set of annual results for the year ended 30 June 2019, but the anticipation of a reduced debt load freeing up cash flows pushed its share price up 12% the day after its results announcement.
UK fund AgDevCo invests €8.7m in Côte d’Ivoire’s DekelOil
The British fund AgDevCo will invest €8.7-million in DekelOil, one of the leading palm oil companies in Côte d'Ivoire.
The subsidiary of the Israeli Rina Group will use the money to develop its palm oil processing plants and help certify its production.
AgDevCo specialises in agribusiness investments in Sub-Sahara Africa and is active in English-speaking Africa, including Ghana, Rwanda, Tanzania, and Uganda.
It is less well known in French-speaking Africa, and this ten-year loan to DekelOil is its first investment in the region.
- DekelOil, a subsidiary of DekelOil Limited Public, is listed on the alternative financial market (AIM) in London.
- The company, which produces palm oil and farms cashew nuts, belongs to the Israeli holding company Rina Group founded by businessman Youval Rasin. Rasin is a co-founder of DekelOil and is currently CEO.
The funding will be used to refinance the Group’s debt in the short and medium-term and to strengthen working capital. It will also help complete the Roundtable for Sustainable Palm Oil (RSPO) certification program for palm oil traceability, which certifies that the industrial process does not impact village planters and their environment.
RSPO certification was introduced in 2004 in Côte d’Ivoire in order to implement policies for the production, exchange, and consumption of palm oil with a view to preserving the environment and sustainable development.
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$170m invested in 40 projects
Chris Isaac, one of the founders of AgDevCo and its Managing Director, said, “Responsible industrial agriculture is the key to development in West Africa. We look forward to supporting DekelOil in its expansion programme, which generates large revenues for thousands of small farmers.”
AgDevCo, 95% of whose funding comes from the UK’s Department for International Development, began exploring the Ivorian market in November 2018, targeting the cocoa, cashew nut, and palm oil sectors.
- Isaac says the company plans to invest about $20m by 2020. The fund is worth $500m and has invested more than $170m in more than 40 projects across the continent, benefiting about 480,000 smallholder farmers.
Decrease in production
DekelOil is one of the leaders in the palm oil market alongside Sania, a subsidiary of the Sifca group, the Ivorian agro-industrial giant. Established in Côte d’Ivoire since the 2000s, DekelOil has a processing plant with an annual capacity of 70,000 tonnes in Ayenouan, in the southeast region towards the Ghanaian border. AgDevCo’s financing will help expand the plant.
- After a complicated 2018, marked by a drop in production volume and a fall in prices, DekelOil achieved an increase in production in the first half of 2019, from 22,242 tonnes to 28,934 tonnes.
Côte d’Ivoire produces 550,000 tonnes per year with 255,000 hectares of plantations divided between industrial and village farmers.
- 75% of palm oil production is consumed in Côte d’Ivoire and 25% is exported to the region.
More than 2-million Ivorians live from the oil palm sector, and it brings in CFA550bn to the country. The country’s objective is to triple its palm oil production without deforestation, but rather through intensive agriculture using high-yield plants.
This article first appeared in Jeune Afrique.