Pineapple Value Chain Scheme

INVOLVING

VINTAGE FARMS LTD AND SAMSAM-ODUMASI COOPERATIVE PINEAPPLE GROWERS & MARKETING SOCIETY LIMITED PINEAPPLE (SOCPGMSL)

 Introduction

The project involves pineapple production by the Samsam-Odumasi Cooperative Pineapple Growers & Marketing Society Limited Pineapple (SOCPGMSL) for processing into juice by Vintage Farms Ltd acting as the TO. Ga Rural Bank Limited (GaRBL) is the Financial Operator (FO) for the scheme. The project is located at Samsam-Odumase/ Amasaman area in the Ga West District of the Greater Accra Region and involves 118 outgrowers.

Purpose

The purpose of the loan:

  1. To purchase 300 KVA generator set
  2. To purchase equipment (Stainless steel Pulper and Kettle) as well as vehicle to increase output;
  3. Working capital to purchase fruit and packaging materials for the factory;
  4. Working capital to support 118 pineapple outgrowers for purchase of herbicides, fertilisers, suckers, land preparation, etc to cultivate 136 acres (55 ha) of pineapples as raw material for Vintage Farms Ltd.

Grant request for the strengthening of a nascent Outgrower Unit to ensure higher productivity of its members, negotiating skills on pricing of produce with TO, etc.

Tenor/Loan Repayment

The tenor and repayment terms of the GRBL/OVCF Term Loan are as follows:

For the Outgrowers

The loan facility shall be for a period of two (2) years (24 months), available to farmers upon repayment for 3 cycles, making a total of 6 years with 16 months grace period on the principal and interest for each cycle. The facility shall be repaid at the end of each farming season of two (2) years.

For Vintage Farms Ltd

The loan facility shall be for a period of 8 years for the allocation for the procurement of equipment and machinery, and 3 years for the working capital with one (1) year moratorium on the principal and 6 months on the interest for both allocations.

There shall be capitalisation of interest during the grace period on a yearly repayment basis.

Pricing

Interest on the loan from the Fund to GRBL for SOCPGMSL shall be charged at Bank of Ghana (BoG) Policy Rate of 16% less 4.5% concession, i.e. 11.5% per annum for the Outgrowers.  On the other hand, the base rate for the TO shall be BoG Policy Rate of 16% less 3.5% concession, i.e. 12.5% per annum.

The interest on the Loan from the GRBL shall be charged at the rate of 21.5% per annum to the Outgrowers, and 22.5% per annum to Vintage Farms Ltd (TO). This means that the Bank shall charge a margin of 10% per annum on the loan to both clients.

The interest rates will be reviewed annually at the beginning of the year, based on the economic conditions at that time.

Justification

  • The scheme is located in the outskirts of the city (mainly rural areas) of the Greater Accra Region. The inhabitants are mainly farmers and by and large underprivileged. Consequently, the project is meant to reduce poverty by increasing outgrowers’ incomes;
  • The projections in the project were based on bankable and commercially viable business plan at the TO level;
  • Marketing opportunities exist for VC products  domestically;
  • The project employs 30  people full-time and can employ over 80 people when fully implemented;
  • The project will save about USD 6.49 million in foreign exchange for the importation of fruit juices by year 5.
  • The lands to be utilized are cultivated pineapple fields. No primary or virgin forest would be cleared for the expansion of the project;

  Some Photos.

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An outgrower pineapple farm at Samsam-Odumsase

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FMT interacting with some members of the pineapple outgrowers

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Stakeholders inspecting the pineapple farms

 
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