Malawi Mangoes

completed

The proposed investment consists of a financing package to Malawi Mangoes (Mauritius) Limited (“Malawi Mangoes – MM” or the “Company”), a holding company that runs an operation in Malawi that produces and markets mango and banana NFC (Not From Concentrate) fruit puree, juice concentrates and fresh fruit primarily for exports markets in Africa, the Middle East and Europe via its wholly-owned Malawian subsidiary, MM (Operations) Limited (“OpCo”). Established in 2009, Malawi Mangoes runs a vertically integrated business combining a state-of-the-art processing facility at Salima township which was commissioned in December 2013 that can process 31MT tons of NFC per day (to eventually process 80,000MT of fruit per year) with primary production farming operations, providing direct control over quality and supply. Established farms, or in process of being established, included two geographically separate units, namely the 126ha Matumba Farm (5 nursery sheds for mango, 16 nursery sheds for banana, and fully planted out with: 48 ha of banana and 20 ha of mangoes; and, 40ha set-aside for biodiversity purpose) and Dzuwa (300 ha, planting planned 156 ha of banana and 36 ha of mangoes, with 90 ha set-aside for biodiversity purpose – planting to commence at the beginning of June 2014). Discussion is currently taken place for the lease of an additional large-scale farm (ref. Nyu Nyu – production of banana, pineapple and mango, including organic) estimated at 3,000 ha which is awaiting approval from the Government of Malawi. In addition, MM has established an out grower scheme totaling 4,000 smallholders which have received either top work grating (30,000 trees) or new saplings. About 3,900 trees began producing in 2013/14 harvest. This allows the Company to have access to competitive sources of key inputs, such as labor, land and water while maintaining proximity to targeted export markets. The Company is seeking to transition into its next stage of growth by adding production volumes and product diversity. The plan is focused on fully realizing the mango and banana potential of the Company’s existing farms and its out growers, diversifying its product base with the development of one new crop (pineapple), and expanding its processing capacity. As such, the proposed investment from IFC and GAFSP investments of US$10 million to the Company to support the expansion of the Company’s processing / production capacity of tropical fruit products in the Salima District in Malawi. The Company’s US$15.0 million expansion program includes: i) development of the Nyu Nyu Farm (US$7.8 million), including installation of a drip irrigation facility; ii) installation of 5 additional ripening chambers (US$3.5 million); iii) addition of a second 8MT per hour processing line (US$2.0 million); iv) expansion of storage capacity, construction of farm buildings and other related equipment (US$1.7 million) (the “Project”).