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$67 billion global cocoa market: NIRSAL lifts cocoa export facility in Lagos with N1.1bn

…beneficiary company, ADT Russet Ltd, to export 4, 000 metric tonnes of cocoa annually

From Left: Member, NIRSAL Plc Board of Directors, Mr. Charles Agbeze, Managing Director/CEO, NIRSAL Plc, Mr. Aliyu Abdulhameed and Managing Director, ADT Russet Ltd, Mr. Charles Eteri during the NIRSAL-ADT Russet Ltd CRG Project Launch in Lagos.

In a bid to enable Nigeria benefit from the $67 billion global cocoa market, the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL Plc) has provided ADT Russet Ltd, a Cocoa sourcing and exporting company in Lagos, with 50 per cent Credit Risk Guarantee (CRG) on a working capital facility of N1.15 billion.

Besides the absorption of a substantial part of its risk exposure in the event of loan delinquency, NIRSAL Plc is also providing efficient monitoring of the project which is aimed at boosting ADT Russet’s export volume to 4,000MT per annum, Persecondnews reports.

Speaking during a tour of ADT Russet factory in Apapa, Lagos, NIRSAL Plc Managing Director/CEO, Mr Aliyu Abdulhameed, disclosed a similar support had been provided another cocoa processing and exporting company in Akure, Ondo State capital also in the Southwest.

From Left: Managing Director, ADT Russet Ltd, Mr. Charles Eteri, Managing Director/CEO, NIRSAL Plc, Mr. Aliyu Abdulhameed and Mr. John Chukwu, Regional Head, Keystone Bank during the NIRSAL-ADT Russet Ltd CRG Project Launch in Lagos.

“We are happy to yet again demonstrate our willingness and capability to support Agro-allied companies across the country to grow their businesses, engage smallholder farmers, and earn foreign exchange for the Nigerian economy,’’ he said.

By supporting ADT Russet’s operations, NIRSAL Plc is also indirectly creating a stronger market for many cocoa farmers who supply their inventory.

By financing ADT Russet, suppliers of seeds, agro-chemicals, and services on the one hand, and cocoa farmers on the other, are economically activated with a marked increase in output, capacity utilization, financial performance, while new direct and indirect jobs are expected to be generated from the project.

A Special Purpose Vehicle (SPV) that was set up only in December 2019 by Arma Dei Trading Limited, ADT Russet Ltd. has leveraged NIRSAL Plc’s support to ship over 1,600MT of commodities to international markets, surpassing the number of its parent company which has been in existence far longer.

The Managing Director of the company, Mr. Charles Eteri, and members of his management team — Mr John Chukwu, Regional Head, Keystone Bank and his team, as well as staff of NIRSAL Plc’s Project Monitoring, Reporting and Remediation Office (PMRO) in Lagos State who are promoters of the project participated in the tour.

From Left: Managing Director/CEO, NIRSAL Plc, Mr. Aliyu Abdulhameed and Managing Director, ADT Russet Ltd, Mr. Charles Eteri during the NIRSAL-ADT Russet Ltd CRG Project Launch in Lagos.

Eteri commended NIRSAL for its unique role in supporting serious-minded business firms whose operations are contributing to Nigeria’s quest for economic growth and diversification, saying his company’s foray into agro exports had been successful while the potential for growth owing to NIRSAL’s innovative support are enormous.

He expressed satisfaction with NIRSAL’s value-chain approach to agribusiness financing and pledged to contribute to the sustenance of the cocoa value-chain by dealing fairly with the smallholder farmers who supply their inventory.

In his remarks, the Keystone Bank official, Chukwu said deposit money banks do not need to be “coerced’’ into financing agriculture, insisting that structured value-chains and de-risked projects would naturally, and on their own merit, attract any profit-seeking business entity.

From Left: Mr. John Chukwu, Regional Head, Keystone Bank and Managing Director/CEO, NIRSAL Plc, Mr. Aliyu Abdulhameed during the NIRSAL-ADT Russet Ltd CRG Project Launch in Lagos.

“Where there is a strong intention to support national priorities like in Keystone Bank, de-risked and structured agribusiness projects become an even more compelling business proposition.’’

The tripartite arrangement between NIRSAL Plc, ADT Russet Ltd and Keystone Bank is part of the growing outcomes of NIRSAL Plc’s high-level engagements with Deposit Money Banks, Merchant Banks, Finance Houses, MDAs of government, and local and international Development Finance Institutions (DFIs), wooing them into an agriculture/agribusiness space that is witnessing paradigmatic changes on account of NIRSAL’s work.

In the few years of its operation, the risk management institution has facilitated the flow of more than N150 billion into agriculture from multiple sources. At least N124 billion of that sum came from commercial banks which leveraged NIRSAL’s Credit Risk Guarantee (CRG) facility in addition to investing in de-risked, structured, and well-monitored projects to make high investment returns.

While NIRSAL Plc relies on the high level of control afforded it by its innovative value chain solutions as a safeguard for its risk exposure, the banks rely on same, in addition to the CRG facility for the safety of their financial investments.

According to the value chain segments where projects are situated, NIRSAL’s guarantee cover on bank loans ranges from 30 per cent to 75 per cent.

Granting the credit guarantees to agribusinesses that meet its requirements is NIRSAL Plc’s routine operation for which no fanfare is required. However, the ADT Russet project is crucial to its running strategy of expanding its portfolio in the Southwest.

Being a major hub of Nigeria’s finance sector, it should be easy, NIRSAL believes, to create a firm handshake between finance and agriculture in the region as an example for the rest of the country. Expectedly, testimonials from NIRSAL’s tentacles in the Southwest are strengthening its push for a more impactful handshake between the sectors countrywide.

NIRSAL Plc is committed to the value-chain approach to financing agriculture. The pull-and-push power of the midstream segment – where ADT Russet operates – can gainfully impact Pre-Upstream and Upstream operators, as well as the downstream markets.

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Written by Per Second News

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