700 Million FCFA Available to Improve Factory Operations and Scale Up Plastic Mulching Technology
Contact: Eric Lakoussan +229 96 39 05 75; elakoussan@ifdc.org
October 4, 2016 – Allada, Benin – Through 2SCALE intermediation, the Netherlands cooperative society Oikocredit and Promo Fruits, the largest juice processor in Benin, signed a new credit agreement in the amount of 700 million FCFA. Promo Fruits specializes in producing fresh pineapple juice for local, regional and international markets. The signing ceremony was co-chaired by Mr. Delphin Koudande, Minister of Agriculture and Fisheries of Benin, and Mr. Lazare Sehoueto, Minister of Industry, Trade and Arts of Benin. The agreement was also recorded in the presence of Mayor of Allada Mr. Michel Aclehinto, IFDC-Benin Representative Mr. Mathias Ahounou, Director of Oikocredit Tossou Nicaise, PROCAD Coordinator (funded by the World Bank) Mr. Bertin Adeossi, President of the IRA Platform Djigla Elie, and CEO of Promo Fruits Dieudonné Alladjodjo.
Based on a reduced rate of 8.5 percent, the new credit has a twofold purpose: to strengthen the technical platform of the factory to increase its production capacity, namely by the installation of a new production line; and to popularize the use of plastic mulching film, a technology introduced by 2SCALE that has demonstrated the potential to increase yields of pineapples by 30 percent. Plastic mulching also increases the incomes of producers by 20 percent, while reducing production costs per hectare and optimizing soil and environment protection, as the technology suppresses costs related to application of herbicides and other chemicals. Recognizing that plastic mulching can cause environmental issues if not properly managed, Promo Fruits has planned to set up a cooperative that will recycle the plastic and export it to Thailand. The company that supplied the plastic to Promo Fruits is committed to buying back this material to reuse it.
The new agreement follows a previous investment credit of more than 400 million FCFA, at 10.5 percent. 2SCALE facilitated this first loan, which supported the company’s efforts to update the management and development of an effective business plan. By making investments of 2 billion FCFA, Promo Fruits increased the production capacity of its plant from 45 to 95 tons/day. 2SCALE supported this growth by 1) expanding the supply of the company’s network to 7,000 new producers, including 17 percent women; 2) introducing, for demonstration purposes, plastic mulching technology, which increased pineapple yields of 35 tons/hectare to around 50 tons/hectare; and c) improving the quality of the raw produce by helping to improve planning and coordination of harvest.
Created in late 2014, the pineapple partnership is now concluded between the company and 2SCALE and ensures that raw produce is secured for the plant by sustainably connecting the company to a network of 10,000 small farmers and agricultural workers. Another shared goal of Promo Fruits and 2SCALE is to improve the nutrition of poor consumers by bringing a pineapple juice to market that is adapted to the purchasing power of base-of-the-pyramid consumers.
“A partnership model that works.”
Beyond the technology package, the pineapple partnership also stands by the emergence of a framework for a multi-stakeholder partnership, which includes Promo Fruits, the organization of producers, transporters, input suppliers and packaging suppliers, and other actors and stakeholders of the pineapple value chain (such as finance institutions including ALIDé, FECECAM, and Oikocredit). Because of this strengthened coordination and performance of the value chain, the Minister of Industry, Trade and Handicrafts of Benin, Lazare Sehoueto, said: “The pineapple partnership is an example of how various actors can join to enhance the quantity and quality of agricultural production to feed the factory and meet a market. If we have a leveraging company like Promo Fruits, which relies on a network of well-identified producers, then the banks will give money, and at the best rates, because the risks are reduced. Today, we speak of traceability, quality and competitiveness, and all this is possible only if producers are integrated in platforms such as the one organized around Promo Fruits. All value chains of our countries could learn from this type of network.”
His counterpart, the Minister of Agriculture, said he is committed to facilitating the supervision of producers for proper application of the technology of the plastic mulching, and urged the City Council to give priority to securing land. The stakes are high: to preserve the brand image and quality of pineapples produced in the town of Allada.
According to the representative of Oikocredit in Benin, “The technical support of IFDC, through the 2SCALE program, is a factor that reassures Oikocredit. 2SCALE has greatly contributed to strengthening relations between the company and small producers, and this second loan opens the way to even greater funding opportunities in the future.”
The Representative of IFDC in Benin thanked the officials representing the State of Benin for their commitment to create an environment that enables IFDC to implement its programs. He also praised the Embassy of the Netherlands for its support of the competitiveness of the agricultural sector of Benin. The signing ceremony was followed by a guided tour of plastic mulching demonstration plots, during which the Minister of Agriculture renewed his full commitment to supporting this partnership model, which he described as concrete and inspiring.
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IFDC is a public international organization addressing critical issues such as international food security, the alleviation of global hunger and poverty, environmental protection and the promotion of economic development and self-sufficiency through the use of agricultural technologies including fertilizers and other inputs.
