Africa’s largest bank by assets Standard Bank has participated in a $300-million dual-currency revolving credit facility (RCF) extended to multinational fresh fruit and related products supplier Westfalia Fruit.
The funding, executed alongside the International Finance Corporation (IFC) and the UK-headquartered HSBC, will help the sustainable avocado producer further expand its intercontinental footprint while exploring new markets across the world.
Standard Bank, the IFC and HSBC will each contribute $100-million to the RCF.
“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,” says Standard Bank Client Coverage South Africa head Clive Potter.
“The deal was relatively complex, as it spanned across several jurisdictions which made this particular solution different to our rand-denominated deals” he adds.
According to Potter, this deal will adequately support Westfalia’s strategic ambitions by allowing the business to retain its global avocado producer status and grow in markets where there is opportunity for growth.
“The partnership with Standard Bank, IFC and HSBC will contribute to our efforts to enhance sustainable farming practices, create jobs in the communities where we operate and support economic growth by enabling 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,” says Westfalia group CEO Alk Brand.
The group operates in 15 countries across five continents. Westfalia intends to upgrade its packing, ripening and storage facilities in Africa, South America and Europe to improve access to markets and will continue to place focus on ensuring sustainability across its production line.
As part of its strategy to become carbon neutral by 2030, Brand says Westfalia will continue to introduce climate-smart growing techniques that conserve energy and water, as well as to reduce pesticide use.
“Westfalia will also use drought- and disease-resilient varieties to address the impact of climate change,” he adds.
“Developing sustainable avocado markets can help boost agricultural productivity to reduce poverty, especially in rural areas where people mainly work in farming.
“The IFC – which is a member of the World Bank Group and is the largest global development institution focused on the private sector in emerging markets – is pleased, therefore, that its investment in Westfalia will help increase avocado production to meet growing demand, strengthen global value chains and boost economic growth in developing countries,” says IFC South Africa country manager Adamou Labara.
“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% 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,” adds HSBC Large Corporate Coverage head Danny Goldblum.