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strategy

Pictured clockwise from left: Highly nutritious red beans sold at the local market in Kigali; Kigali; A woman at the market in Kigali selling fresh vegetables, including eggplants, carrots and tomatoes; Woman harvesting rice on her field in Rwanda

by East African standards. When operating at capacity, the plant will require 28,000 metric tonnes of maize and 11,000 metric tonnes of soya. In the 2015/2016 growing season alone AIF Rwanda sourced maize and soya from over 9,000 Rwandan smallholder farmers through nine farming cooperatives. These farmers were given access to microfinance through KBC (an African banking operation) and were provided with agronomic training by CHAI. As a consequence, farmers that were supplying AIF Rwanda saw an average yield increase of 20% in the first year of production.

Business, not charity

This model can be replicated anywhere, to create an ecosystem that ends ‘hidden hunger’

One of the most important aspects of this venture is the commercial operation. The venture would be impossible without the support of the WFP, which has signed a long-term deal with AIF Rwanda for a supply of super cereal for use in its own school-feeding and famine-relief efforts. Today, AIF Rwanda cereal is already helping feed those devastated by famine in Sudan, South Sudan and Somalia. Another important commercial relationship is with the Government of Rwanda’s Ministry of Health. AIF Rwanda supplies the government with Shisha Kibondo, a fortified porridge flour that the Government of Rwanda purchases to use in its own school-feeding programmes and relief efforts, distributing it to more than 97,000 of the country’s most vulnerable children for free. Finally, and as a key differentiator and core to the venture’s sustainability, AIF Rwanda is selling into the Rwandan and Ugandan commercial markets. Products like Nootri Mama and Nootri Toto can be found on supermarket shelves in Kigali and other cities. The product is high-quality and highly nutritious, and currently sells for about a third of the price of comparable imported products. The profitability of this venture is critical to its sustainability. And that sustainability is critical to the African beneficiaries – the Rwandan employees and the Rwandan smallholder farmers – who rely on AIF Rwanda for safe, affordable, nutritious food, for jobs, and for a stable market

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for their crops. This venture is not philanthropy. It is a purpose-driven, for-profit enterprise that is replicable and scalable. DSM estimates that by 2022, AIF Rwanda will have contributed $36 million to the Rwandan and regional economy, through spending on local feedstocks, energy and labour. No AIF Rwandan employee should ever live below the national poverty line, and currently workers earn between 28% and 38% more than they did with their previous employers. AIF Rwanda intends to launch a ‘Made in Rwanda’ campaign that will serve as the basis for increased international demand and sales. It is estimated that AIF Rwanda will contribute between 5% and 10% to Rwanda’s export sector, securing US$ 40 million in foreign exchange for Rwanda per year. Most importantly, the goal is to reduce childhood stunting in Rwanda – from 38% to 32% by 2020 – by exclusively using AIF Rwanda products.

Onwards

AIF Rwanda is not the end. It is, as they say, the end of the beginning. DSM and its partners are in the process of finalizing negotiations with the Government of Ethiopia to build a similar facility in Addis Ababa for Ethiopian consumers and regional beneficiaries. This model can be replicated anywhere, to create an ecosystem that ends ‘hidden hunger’, allows all children to reach their full physical and cognitive potential, and spurs economic growth through creating a manufacturing base. It also facilitates farmers to adopt better technology and practices increasing productivity, yields and profits, and helps enable social stability. African companies, employing Africans, using African crops, to feed African people. It is the first glimmer of the end of international aid. It is also a promise kept by a young chief executive on a chilly winter afternoon in Switzerland more than ten years ago. — Liz Mellon is a world-leading business educator. — MixMe, Nootri Mama and Nootri Toto are trademarks of DSM Q4 2017 Dialogue

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