Kossam (La Laiterie du Berger)
- Business model
Investment Name: Kossam (La Laiterie du Berger)
Total AgriFI Financing: Equivalent in XOF/ECO of EUR 600,000
Environmental and Social Category: B
(A) high risk, (B+) medium high risk, (B) medium risk or (C) low risk
In 2018, La Laiterie du Berger (LDB) decided to “spin-out” its milk collection activity by creating Kossam, a subsidiary in which La Laiterie du Berger and a farmers cooperative supplying herder’s milk to LDB are shareholders.
In addition to collecting milk from farmers and selling it to La Laiterie du Berger, Kossam also provides animal feed as well as capcity building to farmers. Given the growing demand for dairy products in Senegal, La Laiterie du Berger is expanding its milk production capacity and its fresh dairy products offering. It therefore needs to increase its milk collection in the Richard Toll area. La Laiterie du Berger established Kossam in order to create a milk value-chain in the Richard Toll area and increase milk production.
To allow this, AgriFI will lend the equivalent in XOF/ECO of EUR 600,000 to La Laiterie du Berger that will provide Kossam with a shareholder loan and equity investment of the same amount.
Funding objective and impact:
Kossam is setting up an investment plan that will be financed by a large proportion via a grant received by the Mastercard Foundation and a loan from AgriFI. This will allow Kossam to:
- Develop its milk supply chain by:
- Increasing the number of farmers collected: Between 2,500 and 4,000 farmers will be collected by 2023 (against around 1,000 today) in the Richard Toll area. It should allow to collect 3,000 tons of fresh milk by 2023;
- Investing in mini-farms (little barns where a farmer stalls its best dairy cows);
- Support, give training to farmers and improving access to veterinary services and animal feed;
- Empower Kossam and the farmers’ cooperative capacities and governance.
Why AgriFI wants to fund this project:
- Local economic growth: La Laiterie du Berger and Kossam are creating economic opportunities for cattle breeders. Between 2,500 and 4,000 herders will be collected by 2023 (1,000 today);
- Partial substitution of imports: the project will foster local production of fresh milk; currently the 2nd main imported product in Senegal after rice;
- Food security and rural development: increase of yields for farmers improves livelihood and contributes to food security in the country;
- Farmers empowerment and entrepreneurship: the project has a structuring effect on the milk value chain by empowering farmers via the cooperative and developing entrepreneurship;
- Gender-smart investment: women have been historically involved in Senegal’s milk value chain. 38% of Kossam’s farmers are women.
Environmental and social rationale:
The Project is rated category B.
Activities come with very limited risks.
IFC Performance Standards 1 to 3 might be triggered through LDB activities. The company is currently developing policies and procedures to address the mitigation of any potential negative impact.
Financial Instrument: Subordinated debt
Amount: Equivalent of EUR 600,000 in XOF/ECO
Client’s website: https://lalaiterieduberger.wordpress.com/