Norfund is investing USD 10 million to finance a cashew processing plant in Cote d’Ivoire. Processing of cashew nuts is expected to create 2000 new jobs.
Valency International Trading SARL (“Valency CIV”) is a subsidiary of Singapore-based Valency International Pte Ltd (Valency Group), which is a diversified, integrated supply chain manager in agri commodities and agri inputs with subsidiaries in 15 countries. The agri-commodities sourced from African farmers through Valency’s value chain are marketed internationally in 38 countries.
Norfund is providing a USD 10 million loan to Valency CIV to build an integrated local processing hub, which includes the construction of a 45,000 tons per year cashew processing plant on the outskirts of Abidjan, with plans to being a key participant in the cashew value chain in the Cote d’Ivoire.
Cashew nuts are Cote d’Ivoire’s third largest export commodity, generating an estimated USD 800m in revenues in 2020. The country is the world’s largest producer of raw cashew nuts, and in 2020 it exported over 660,000 tons.
Though the share of nuts being processed locally in Cote d’Ivoire has increased in the last few years, in 2020 it stood at only 12%, significantly lower than countries like Mozambique and Ghana. Valency is currently exporting raw cashew nuts to Asia for processing before they get shipped as cashew kernel primarily to Europe, the Middle East and the USA.
“By enabling Valency to develop a vertically integrated cashew value chain through the establishment of local processing, Norfund invests in the creation of sustainable local jobs and promotes local content via ‘value retention’ in the country. The investment fits into Cote d’Ivoire’s national cashew processing policy and represents an opportunity to support a competent management team with deep sector expertise and a commitment to build sustainable and responsible sector practice,” says Fabrice Mpollo, Investment Manager at Norfund.
“We are very grateful to have a partner like Norfund who shares in our vision and has joined us in our endeavor to establish a strong Cashew value chain in Cote d’Ivoire. Through this project, Valency will support cashew growers/farmers in the region, enhance sustainability and improve livelihood through addition of skilled jobs. The cashew processing plant is in line with our shared vision outlined as part of Valency’s Food Ingredients strategy, and commitment to develop a long-term sustainable business model in Africa,” says Sumit Jain, Chief Executive Officer at Valency International Group.
Norfund expects to see the employment of a workforce of over 2000, with 25% on permanent contracts at the factory and 75% on shorter-term contracts as skilled labor required annually for processing. Women are expected to fill approx. 80% of the jobs. The investment will also contribute to increased local tax contribution.
The Valency Group has already established a profitable trading across West Africa and cashew processing business in Nigeria, and the planned investment will be its second on the continent. This follows similar cashew processing projects successfully executed by the group in India and Vietnam.
Norfund will follow up on this work through taking up a position as a Board Observer, in collaboration with Finnfund, its Finnish sister fund, who is providing a loan of the same size under the same terms.
“We are excited to support the leadership team at Valency International, and this investment marks an important milestone for Norfund, as our first direct investment in Cote d’Ivoire. We look forward to continuing to deliver on our mandate to drive development and create additional jobs by investing in and supporting companies in the Agribusiness and Manufacturing, Renewable Energy, Financial Institutions and Green Infrastructure sectors in Cote d’Ivoire,” adds Naana Winful Fynn, Regional Director for West Africa for Norfund.
Valency: Navin Askaran, Group CFO, email@example.com, tel. +65 9727 7338
Norfund: Per Kristian Sbertoli, Head of Public Relations, firstname.lastname@example.org, tel. +47 930 89 103
Valency International Pte Limited (Valency International) is an international integrated supply chain manager with its headquarters situated in Singapore. In a short span of time, Valency International has expanded its network across various continents. We are present across the agri value chain from origination and supply chain, processing, branded retail to B2B distribution. For more information, please visit www.valencyinternational.com
Norfund is the Norwegian Investment Fund for developing countries. Our mission is to create jobs and to improve lives by investing in businesses that drive sustainable development. Norfund is owned and funded by the Norwegian Government and is the Government’s most important tool for strengthening the private sector in developing countries, and for reducing poverty. Norfund’s committed portfolio totals 3.3 billion USD in Sub-Saharan Africa, South-East Asia, and Central America. Norfund has four investment areas: Clean Energy, Financial Institutions, Scalable Enterprises and Green Infrastructure. Investments in Clean Energy account for about 50% of the portfolio and 50% of the portfolio is in Sub-Saharan Africa. For more information, please visit: www.norfund.no
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