Prices for soya, maize, and rice have trended higher in recent years, driven by increasing demand within Ghana from poultry growers for soya and maize and by an increased demand for rice among the population at large. However, prices for these commodities typically show tremendous volatility throughout the year. Due to the lack of warehouse capacity in the northern regions, prices tend to be at their absolute lowest point for the year around harvest time, then often rise dramatically later in the year when the amounts in existing storage run out. As such, any experienced aggregator in the market with warehouse capacity has an opportunity each year to generate substantial profits if it can purchase large amounts at harvest time and then sell at least some portion later in the year when prices rise. Mechanization services are also at a tremendous deficit in Ghana in general and the northern regions in particular. Re-emergence of cotton production in the north has increased the already outsized demand for mechanization services.
Gundaa Produce Enterprise, founded in 2002, has been aggregating maize, rice, and soy from smallholder farmers for sale to industrial processors in the Northern and Ashanti regions through a network of 61 registered retailers. Gundaa works with over 100 FBOs representing 3,000 farmers in eight districts in the Northern Region. To increase its stocks, the company has secured 50 acres for maize production, 40 acres for rice production, and 20 acres for soybean production. With a strong retail network and 500 MT capacity warehouse acquired with support from the USAID-ADVANCE II project, the firm intends to increase its warehousing capacity and production of maize, rice, and soy to take advantage of premium prices offered during the lean seasons.
Gundaa is seeking $1.2 million in long-term financing to purchase tractors, trucks, shellers and planters, as well as working capital to expand its commodity trading and maize, rice, and soy production business. The company will make full financials available for potential investors during due diligence.
Gundaa could benefit from a BAS provider to help it develop the necessary documentation to obtain a loan from a financial institution.
A USAID-FinGAP ERR has not yet been conducted.
Several organizations and initiatives create an enabling environment for the investment, including:
Alhaji Zacharia Alhassan, Managing Director, +233 (0) 372 091 491; email@example.com