Ginger production gets boost as firm raises $17.5m for value chain
• Moves to close 34-million-tonne gap
Data from Nigeria’s Ministry of Agriculture shows that despite being the third highest exporter of ginger globally, Nigeria’s production is put at 31 million tonnes, while demand is put at 65 million tonnes, leaving a gap of 34 million tonnes.
While Nigeria accounts for more than 16 per cent of the global production of ginger, it gets less than four per cent of the export market share.
To close the gap and maximize the potential in the spice and herbs subsectors, Agricorp International, Nigeria-based agribusiness startup producing and exporting spices, has raised $17.5 million to increase its processing capacity up to 7,000 metric tonnes yearly.
Anchored by Kenneth Obiajulu and Wale Omotimirin, the agribusiness startup contributes to meeting the growing demand of spices as an export material, which contributes to foreign reserve earning and gross domestic product in the sector.
They said the fund would help to expand the frontiers that are capable of increasing farmers’ productivity, value addition, greater exports, sustainable means of poverty alleviation and wealth creation as well as employment opportunities for stakeholders in the value chain of gingers and other spices.
The fund was raised from Vami Nigeria, One Capital LLC and AFEX. Nigeria-based Vami led the funding round with $11.5 million in equity, while the other investors provided working capital financing for the company. Ernst & Young (Nigeria) served as transaction advisers, while Elisio Law Office and Pavestone Legal served as legal advisers.
Obiajulu, Agricorp’s Chief Executive Officer, said: “We believe that by increasing our capacity to 7,000 metric tonnes, we will maximise the potential to boost Nigeria’s forex earnings through export, contribute our quota to improving the Nigerian GDP from agriculture, and serve as a worthy model to African youths who aspire to be agribusiness owners. We want to show them it is possible and very rewarding as well.”
According to lead investors, Vami Nigeria: “We led the round because we saw a clear growth path, strong social impact, excellent financial trajectory, and global collaborations with key partners. Most importantly, the depth of knowledge, passion, and resilience of the team is unrivalled.
Samirah Ade-Adebiyi, Managing Director at AFEX, said: “Our other businesses have transacted with Agricorp on several occasions and have seen the business grow over time. Now, we are committed to providing the working capital they require to scale their operations at any level.”
The agro-startup has supported over 5,000 smallholder farmers with inputs and training on good agronomic practices since 2018, and has built a 0.5tonne/hour spice processing plant in Kaduna State. This has helped in deepening production, curtailing post-harvest wastage and increasing farmers’ income significantly.