Company plans to expand its production footprint and explore new markets
Avocado multinational Westfalia has secured US$300m funding from three banks for its ongoing international expansion. It will use a multi-million-dollar revolving credit facility (RCF) from HSBC UK, the International Finance Corporation (IFC), and Standard Bank to fund potential investments and working capital.
The company plans to expand its sustainable avocado production at its existing packaging, ripening and storage facilities while exploring new markets.
With the avocado market currently estimated at US$7bn by value of trade, Westfalia will further develop its orchards and nurseries in Colombia, India, Chile, Mozambique, Peru and South Africa to scale up avocado production.
HSBC UK acted as Mandated Lead Arranger and Documentation Coordinator on the refinance, with each lender increasing their participation to US$100m in Westfalia’s new US$300m RCF.
As part of its strategy to become carbon neutral by 2030, Westfalia said it will continue to introduce climate-smart growing techniques that conserve energy and water and reduce pesticide use. Westfalia will also use drought and disease-resilient varieties to address the impact of climate change.
CEO Alk Brand said: “This investment will enable Westfalia to continue to grow its business, strengthen value chains to sustainably produce and source quality avocados, and improve access to export markets to meet the growing demand for the fruit.
“The partnership with HSBC UK, IFC and Standard Bank will contribute to our efforts to enhance sustainable farming practices, create jobs in the communities where we operate, and support economic growth. I am ready for a transformational year in 2023, and I know I can count on the support of HSBC UK in the process.”
Danny Goldblum, head of large corporate coverage at HSBC UK, added: “We’re pleased to have delivered a bespoke solution to meet Westfalia’s specific requirements demonstrating our strong capabilities to lead and coordinate across different teams.
“The global fresh fruit market is expected to grow by 5.53 per cent annually, and this funding will help to meet rising demand and grow the global agriculture sector, providing new jobs across Africa, South America and India. We also look forward to seeing the business continue its sustainability efforts and meet its net zero targets in 2030.”
Adamou Labara, country manager for South Africa at IFC, said: “Developing sustainable avocado markets can help boost agriculture productivity to reduce poverty, especially in rural areas where people mainly work in farming.
“IFC’s investment in Westfalia will help increase avocado production to meet growing demand, strengthen global value chains and boost economic growth in developing countries.”
Clive Potter, head of client coverage South Africa at Standard Bank, commented: “Standard Bank is Westfalia’s leading banking partner for its South African operations and we are pleased to grow our support for Westfalia’s international business and become a key funding partner both locally and globally
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