PORTFOLIO COMPANY - DEAL CARD

GOLDTREE S.L. LIMITED

Country: Sierra Leone

Capital: Freetown

Population: 5.24 million

Percentage below poverty line: 70%

GDP per capita: US$ 900

Exports: Diamonds, rutile, cocoa and fish

Recent history: Civil war raged from 1991 to 2002, which devastated local food production and infrastructure.

The business: Palm oil plantation and milling company.

Location: Daru in the Eastern Province of Sierra Leone.

Activity: Production facility for a smallholder supply base to supply the domestic and regional markets with crude palm oil.

Environmental, Social and Governance (ESG): Brownfield with high positive social impact.

Deal team: Duncan Owen, Colin Watson and Yannick Mpollo.

Announcement date: August 2011

 

Since the first close of the African Agriculture Fund (AAF), Phatisa has been actively pursuing investment opportunities in sub-Saharan Africa, where we can partner with businesses showing strong growth potential with sound management.

AAF has concluded an agreement to invest US$ 10 million alongside the Finnish Fund for Industrial Cooperation Limited (FINNFUND) and the sponsors in Goldtree, Sierra Leone to bring the total investment to US$ 20 million.

Goldtree will procure fresh fruit bunches for processing into palm oil from over 8,000 independent outgrowers who are located within a 40 km radius of the mill at Daru. The original mill was destroyed in the civil war in the early 1990s and AAF/Finnfund’s investment will finance a new and larger mill on the same site. The palm oil produced will largely be consumed in the domestic market.

The Fund aims to use TAF (Technical Assistance Facility), funded by the EU and managed by IFAD - to upgrade roads, deliver a yield improvement programme for growers and initiate a replanting programme.

Even though Sierra Leone weathered the economic crisis well, the 6% growth forecast for 2012 will still be below pre-crisis rates. This points to the need for further growth acceleration if the country is to overcome its economic fragility. Sierra Leone is one of Africa’s best climates to grow palm oil and sees this agricultural product being as important as its other mineral resources as it aims for growth. Goldtree is well placed to capture the benefits of a rapidly growing economy and also make a significant impact on the lives of the local people.

Phatisa’s strategic investment in Goldtree represents a pioneering step into West Africa and acts as a springboard for similar private equity transactions in the region. Our ability to execute innovative deals affirms Phatisa’s standing as the African agri/food equity partner for growth, giving the African Agriculture Fund a solid foundation to further expand its portfolio of African food businesses.

CONTACT DETAIL

If you require more information on the Goldtree investment, please contact us:

Stuart Bradley Founding Partner, Fundraising & Investor Relations
Email stuartbradley@phatisa.com