Annual Report Common Fund for Commodities 2012

Page 36

GGB/SLBL

Why did the private sector engage in PPPs?

While EUCORD initiated the project within Heineken (a major shareholder of SLBL), it was very much personally

There are two key reasons why the companies became

driven in the beginning by a few senior managers at

involved in PPPs. The first was financial; companies needed

Heineken. They believed that local sourcing was important

financial support from CFC for investing in new and under­

for the company, as well as for local economies. Because

developed, small-scale supply markets to reduce their

relatively short-term planning is inherent to companies,

financial risks. It was only under the pre-condition of

these kind of longer term projects are not always supported

co-finance from CFC that the companies’ management

by CEOs. CFC money and technical assistance through the

agreed to participate in the PPPs.

project in setting up local supply chains enabled Heineken to make longer-term investments.

In addition, the companies needed technical assistance in setting up and organising supply chains with smallholder farmers. As the companies’ role in the supply chain is food

Tropical Heat

processing (roasting coffee, brewing beer or cutting and ­frying potato crisps), and companies were primarily buy-

Tropical Heat was approached to participate in the programme

ing in bulk, without any traceability back to the source,

by CIP (International Potato Center). The key driver for

they were not involved in agriculture and thus lacked the

Tropical Heat to collaborate in the CFC programme was

technical expertise to become directly engaged in primary

to improve yields through stabilising supply of good quality

production. To gain this expertise, the companies cooper-

ware potatoes for its factory. Tropical Heat had not previously

ated with CFC implementing partners such as TechnoServe

been involved in farm production and needed assistance.

and ministries of agriculture.

It engaged itself actively in supply chain meetings with farmers and intermediate traders which gave Tropical Heat a comparative advantage in the market.

Potato crisps processing

Photo: KIT

Tropical Heat

34 | Common Fund for Commodities Annual Report 2012


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