A global stage
An opportunity came in the spring of 2013 when DSM was approached by the Clinton Health Access Initiative (CHAI) to determine if DSM was willing to take the lead in a new approach to development. CHAI and the Government of Rwanda invited DSM to build a nutritious food plant in the Rwandan capital city of Kigali. At the time, some 38% of Rwandan under-fives suffered from severely stunted growth due to malnutrition. The Government of Rwanda was looking for solutions, and DSM was the organization they believed could deliver. DSM first looked for strategic partners to help finance this new venture. Unfortunately, by traditional corporate financial standards, investment would not deliver the near-term financial returns that most private sector organizations require. Additionally, this venture was not without risk. While Rwanda is now politically stable, Africa historically has been a difficult place for Western organizations to operate. And, being landlocked, Rwanda presented some acute logistical and basic infrastructure challenges. DSM had to find an alternative solution. Following a ‘road show’ to potential investors, including governmental agencies, development banks, private equity funds and NGOs, DSM reached an agreement in principle with the World Bank’s International Finance Corporation, the Netherlands Development Finance Company, and the DFID Impact Acceleration Facility. Negotiations over contractual terms on the investment took two years. Finally, in July 2015, agreements were signed in Amsterdam – and Africa Improved Foods BV (AIF) was born. Soon thereafter, Africa Improved Foods Rwanda was created, with AIF as the 91% shareholder and the Government of Rwanda as a 9% shareholder. The Government of Rwanda
Since 2007, Royal Dutch State Mines has continued to adapt, evolve and change. It divested its non-core industrial chemical, anti-infective and pharmaceutical businesses, and continued to acquire nutrition, food ingredient and clean energy operations to expand internationally. Today, it has US$11 billion in annual sales, with 25,000 employees operating across six continents. It bears little resemblance to the coal miner ‘Dutch State Mines’ and has readily embraced its mission to Do Something Meaningful.
made in-kind contributions of land in the Kigali Special Economic Zone, Nyandungu, in return for its shares, and committed to using any profit sharing to underwrite the costs of feeding programmes in Rwanda. Construction of the facility in Kigali finally began. It would produce nutritious porridge flour specifically for expecting and lactating mothers (Nootri Mama), as well as for children between the ages of six months and three years (Nootri Toto), using Rwandan feedstocks (such as maize and soya) manufactured to international quality standards.
The new factory
Following a year of construction challenges, the plant reached mechanical completion in December 2016. In Q1 of 2017, the first shipments of food began rolling out of the facility, and the plant continued to scale up. The total cost of construction was approximately US$60 million. The plant has been successful in manufacturing to the highest quality and safety standards. This has required training, of not only hundreds of workers in the plant who do not have a history of working in modern manufacturing operations, but also of thousands of smallholder farmers who are being taught how to better harvest, store and transport their crops. The plant currently employs 315 Rwandans in its operations, and employed over 600 during the construction phase. Annual capacity of the facility is 45,000 metric tonnes, making it one of the largest food manufacturing plants in East Africa. This one facility will soon have the capacity to feed nearly two million people a year – miraculous
and the firm has even seconded employees to WFP operations. During the last decade, this partnership has made it possible for tens of millions of African children to reach their full potential by ensuring that they receive not just sufficient calories, but also vital micronutrients. Post-2007, DSM started other nutrition initiatives in Africa with affiliated organizations, such as Sight & Life, working on vitamin A intervention; Partners in Food Solutions with General Mills, Cargill, Buhler and Hershey’s; and partnerships with groups like Vitamin Angels. Yet DSM wanted to do more. It wanted to facilitate nutritious food production in Africa, using African feedstocks produced, by Africans for Africans, to break the continuous cycle of undernutrition, foreign aid and economic stagnation.
Dialogue Q4 2017
Published on Jul 27, 2017