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