GreenTec Capital Invests in Ugandan Grain Agribusiness
GreenTec Capital announced it has agreed to make an undisclosed capital investment in Diving Masters Limited (DML) – a Uganda-based agribusiness.
Founded in 2007 by Orisa Raphael Jawino, DML is active in the production and trade of soybean, corn, and rice as well as management of value chains. The company operates 5,200 acres of farmland and works with more than 48,000 smallholder farmers to produce crops for the Ugandan market, generating more than US$4 million in revenue with a 63 percent gross margin last year.
DML also provides business and farming training to its smallholder farmers as well as access to credit and advanced production technologies in order to raise yields. DML also provides its farmers with farmgate prices for their crops that are up to 20 percent higher than local market prices, contributing to the overall improvement of the lives of Uganda’s farmers.
“Originally we started with trading in grains and legumes and, by 2008, we realised [sic] that there was a big gap in the supply of soya beans in the country and the demand was so high whereas the supply was low,” Jawino told How We Made it in Africa in 2013. “So we decided now to go into production of soya; that is growing it ourselves. We opened up farms and as time went on we also incorporated out-growers.”
“Due to the changing lifestyles of people today, the soya eating habits is increasing day by day – this right from the middle class across to the rural villages,” said Jawino. “There has been a lot of encouragement of people to eat soya food in the country and this had created wide demand.”
GreenTec states that it targets “under the radar companies with a sustainable business model to create exclusive investment opportunities with economic, social, and/or environmental impact in Africa.”
Toward this end, GreenTec Capital will be an active partner with DML in the form of providing funding and help with business development as DML strives to expand its business operations to include the processing of edible oils, cereals and groundnuts and ingredients that will add value to its farmers’ crops in order to drive diversification.
Only weeks ago, Thomas Festerling, co-founder and CFO of GreenTec and François Améguidé the firm’s new head of its African Office traveled to Uganda where they met with Jawino and his team and toured the company’s processing facilities.
“During our recent visit, we have been very impressed by the capacity of DML to change lives in his region while doing business,” said Thomas Festerling before adding, “We see a solid business case with the potential for strong social impacts, particularly with the high potential for scale with the application of modern farming technology.”