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Zimbabwe: AECF funding for soy cultivation outgrower scheme and processing plant

General information
Project location: Zimbabwe

With assistance of Advance Consulting the Zimbabwean company IETC Zimbabwe Ltd was successful in securing project funding from the African Enterprise Challenge Fund (AECF) for a new soy processing plant and outgrower scheme in Zimbabwe. IETC is a daughter company to the Export Trading Group, one of Africa’s leading agricultural trading houses (see also: www.exporttradinggroup.com).

During the project 7,000 small-scale soybean farmers will be contracted to supply the processing plant of soybeans under the outgrower scheme established in the Makonde, Guruwe, Kadoma and Hurungwe districts. The small-scale farmers will be trained in the cultivation of the soybeans and IETC will offer transportation, input starters packs on credit via contract farming agreements and off-take guarantees of the produced soybean at prevailing market prices.

The pilot-scale processing plant will be established in Harare with an annual production capacity of 3,600 MT of Texturized Soy Pieces (TSP). This is a highly nutritious and tasty source of protein that is affordable to the vast majority of the Zimbabwean consumers. Valuable by-products of soy processing plant will be soy oil (400 MT per year) and soy powder (600 MT per year). The factory will be HACCP certified to ensure the highest standards of food safety.

TSP will mainly be marketed to the low income population of Zimbabwe in 90 grams packages through a network of 400 retailers. In addition, the company will pursue an institutional market, consisting of hospitals, prisons, NGOs and schools. IETC expects to market 75% of TSP to the retail market and 25% of TSP to the institutional market. In the business model it is estimated that 3 years after the start of the project, the project will have a market penetration rate of 11%. Soy powder will be sold to processors of stock feed, soy oil will be marketed to vegetable oil producers, and excess soybeans will be marketed to stock feed producers and vegetable oil producers.

The total capital investment of the project amounts to more than USD 2.1 million. IETC will contribute more than 50% of the total investment costs. The AECF contribution comprises a grant and loan component. The project will start during the fourth quarter of 2011.

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