IFC, FMO announce loan to support South Africa's blueberry industry
A loan from IFC, a member of the World Bank Group, and the Dutch Entrepreneurial Development Bank FMO, announced a loan to support growth, exports, and jobs in South Africa's blueberry industry.
The €3 million loan includes €1.5 million from IFC and a €1.5 million B loan from FMO. The financing will support United Exports' ongoing capital expenditure projects and help maintain local farmers' access to markets and employment. United Exports produces, packages and ships blueberries under its proprietary OZblu brand within South Africa and exports roughly 90 percent of its output to markets outside Africa.
The company employs around 3,800 permanent and seasonal workers. Since the COVID-19 outbreak, United Exports has put in place extensive social distancing and PPE protocols and facilities to protect its employees, while investing to maintain growth and jobs in the sector.
IFC's portion of the financing comes from its COVID-19 fast track facility, a global fund announced in March 2020 to support industries vital to job creation and economic growth. Agriculture and agribusiness are important sources of jobs and export earnings in South Africa, which has been badly hit by the pandemic.
"Despite the difficulties, we have continued our growth trajectory during the COVID-19 pandemic. The additional liquidity from the lenders will help us to continue with our capex investments and continue to create jobs and ensure we continue to deliver on our product quality objectives," said Jon Salters, United Exports CEO.
United Exports plans to continue to expand the size of its orchards with their proprietary OZblu varieties in South Africa. In 2021, the company plans to add up to 150 new permanent jobs and roughly 1,250 seasonal jobs at the peak picking season.
"With COVID-19 creating uncertainty across value chains and sectors, it's now more critical than ever to support companies vital for job creation and growth, especially in the agribusiness sector," said Adamou Labara, IFC's country manager for South Africa.
"The blueberry industry is one of South Africa's fastest growing agricultural sectors. In berry growing regions, this superfood boosts job creation. With this COVID-facility we will help United Exports maintain local berry farmers' access to markets and employment," said Hans Bogaard, Manager: Agriculture, Food & Water at FMO.
South Africa's Western Cape Department of Agriculture estimates that the country's blueberry sector employs 5,700 people. The fruit is an increasingly important product for South Africa, with production climbing to 18,000 metric tons in 2019/20 from 11,000 the year before, according to the South Africa Berry Producers Association.