Descripción

The goal of this campaign is to provide working capital to a family-owned company based in the coastal area of the Guayas Province (Ecuador), active in the aggregation, processing, and sale of cocoa products to Europe, North America, and Asia. The Company sources its produce from 2.500 cocoa farmers in the 4 provinces of Los Ríos (the area with the highest production of the world-renown ‘Cacao Nacional’, also named as “Cacao Arriba”), Sucumbios and Orellana (where cocoa produce is differentiated by the area of influence of the Yasuni Biosphere Reserve), and El Oro.

When European traders found Cacao Nacional in the Gulf of Guayaquil, with floral aroma profiles, they asked the merchants where these amazing beans came from. The locals answered “Arriba” – “up-river”, meaning further up the watersheds of the rivers that reach the gulf. The name stuck, and to this day, this cacao is known in Ecuador as “Cacao Arriba”.

The Company is focused on shortening the long supply chains that hinder farmers' market access and on improving their productivity and quality controls through two “capacity-building” programs, which benefit 5.000 families. Its mission is to export the best fine Ecuadorian cocoa beans and their derivatives to the world, promoting fair trade with small producers and traders, while integrating the whole value chain and guaranteeing high-quality standards and responsibility for its human resources and care for the environment.

Overall, Ecuador is the 2nd producer of cocoa in Latin American after Brazil, and for many years, it has been recognized as the largest fine or flavoured cacao producer in the world.

There are two general categories of cocoa beans in the world: “fine or flavour” and “bulk or ordinary”. Fine cocoa production represents less than 5% per year of the world’s cocoa bean production and Ecuador is the largest producer of “fine or flavour” beans, producing over half of the world’s production – the raw material that is required in the European and American industries for fine chocolate production. Evidence from Ecuador suggests that the cocoa premium over the New York Stock Exchange price of fine or flavour cocoa beans is 20% to 30%.

Cocoa production in Ecuador has experienced an overall upward trend in recent years, reaching an estimated 328,000 tons in the crop year 2019/2020, for a value of c. USD700m worth of exports. Production in Ecuador is forecast to continue growing, reaching 340,000 tons in the 2020/21 season.

In Ecuador, approximately 360,000 hectares of cocoa are cultivated by approximately 90,000 farmers. Most of these farmers are relatively poor and operate on less than 10 hectares of land (according to representatives from non-governmental organizations in Ecuador). Their incomes are largely dependent on agricultural production with almost half generated by the sale of cocoa beans. 85% of cocoa production occurs in the coastal plain region of Ecuador.

The funds raised through this campaign will be used as Transactional Working Capital to provide liquidity to the Company from its procurement and processing stage, all the way through its exports. This is the second campaign promoted by Working Capital Associates to provide funding to this company and the sixth to provide funding to small producers from Peru and Ecuador.

El impacto

• Promotion of an inclusive value chain by joining 5.000 local producers who have access to an international export value chain.
• Better working and financial conditions for small producers, who own less than 10 hectares of land. The Company has established a sustainability program that offers farming communities the following services: technical assistance and training to improve productivity; advice and support to improve the quality of post-harvest; training to develop management, financial, and trading capacities in communities; fair trade practices to improve life quality in the communities. 
• Rural poverty reduction: smallholders will receive a higher profit margin for their produce, which can be allocated to more than pure subsistence. They will also have access to larger national and international markets.
• Contribution to the Company’s social mission, by ensuring cash and premium payments at the “farm gate” to the farmers and early payments at a premium to the Company. The company can then reinvest the money in training, education, social support to the farmers and their families, health support and help with organic and fair-trade certifications.
• Gender quality promotion: the company is fully owned by its female CEO, who runs a senior and experienced team.
• Contribution to environmental protection: the Ecuatorian focus on pruning cacao trees, aims to help farmers make the most of what they already had, so they wouldn’t need to press further into the Amazon. Among other sustainable techniques are shade-growing and multi-cropping, as well as the correct use of fertilizer and pesticides, including natural pest control and compost.  The goal is to maintain a record of the cocoa until its final delivery to the consumer, guaranteeing traceability on each of its processes from the production, postharvest handling, and cocoa distribution. 

Impact Indicators

685

Personas impactadas

Contribución a los Objetivos
de Desarrollo Sostenible

Objetivos de Desarrollo Sostenible

Viabilidad Financiera

Transactional Working Capital is a short-term debt financing asset that allows the seller to receive advance/early payments and the buyers to delay their payments. In commercial sales, standard market practice for payments is between 30 to 90 days from the time when the seller issues its invoice – such payment terms usually strain the cash availability of the seller for its own procurement, while allowing the buyer to hold on to their cash for longer. Often, the seller’s working capital gap is resolved by accessing traditional bank financing, which usually requires to be over-collateralized over hard assets (i.e. factories, buildings, machinery). However, due to the elevated requirements demanded by banks as guarantees for the loans, impossible to meet for smallholders, such bank loans seldom resolve any working capital gap.

Transactional Working Capital fills this gap without the need for collateral. That, in turns, obtains the following results for both the smallholders and the aggregator:

• Liquidity to procure raw produce: the aggregator/processor is able to grow its business by increasing the level of raw material procurement to fulfill new orders for its international buyers, without waiting for payment from existing buyers.
• Premium Prices: the producers receive a premium price that reflects the certified and fair trade value of the cocoa, resolving the cash pressure and eliminating the need to provide discounts to the buyer, in return for early payment.
• A higher profit margin that can be reinvested not only to pure subsistence but also in capacity building of technical agricultural skills and technologies, improving production standards, and yield investments in organic, fair trade, and quality certifications.

WCA maintains a Trade Credit Insurance Policy with a global insurance company providing worldwide trade credit insurance, surety, and collections services, with a strategic presence in 50 countries. The Project repayment will be guaranteed under such Trade Credit Insurance Policy, which effectively protects GoParity lenders from default in a credit-related event (e.g. insolvency, bankruptcy). The policy covers losses from Insolvency, Protracted Default, and Political Risk and covers up to 90% of the value of the underlying commercial transaction financed by WCA. As WCA provides up to 80% financing to any underlying commercial transaction, the policy in essence covers more than WCA’s entire financing.

Download Información Financiera para el Inversor de Financiación Colaborativa (IFIFC)

El Promotor

Sobre WCA (Working Capital Associates) LLP

Working Capital Associates (WCA) es la única empresa – liderada por mujeres y cuya propiedad es totalmente femenina- que proporciona financiación directa a la cadena de valor de productos agrícolas en África subsahariana (SSA) y Latinoamérica (Latam).

WCA está comprometida con un enfoque de negocio profesional, ético y transparente, efectuando inversiones socialmente responsables “que permiten a los inversores abordar los criterios medioambientales, sociales y de gobernanza empresarial (ASG) mediante la inversión en soluciones específicas, como por ejemplo la energía renovable, gestión de residuos y agua, silvicultura y agricultura, productos de salud e inclusión financiera ” (PRI).

La empresa sigue dos cuestiones clave:

La empresa también aplica inversión en lentes de género, procurando financiar un nivel significativo de negocios liderados por mujeres que siguen los estándares de gestión sostenible y responsable.

El propósito de WCA es aumentar la cadena de valor proporcionando acceso a financiación a PYMES y enfocándose en tres principios clave dentro del marco de los ODS:

• ODS 2 – Hambre 0 y seguridad alimentaria, promocionando agricultura sostenible.

• ODS 12 – Asegurar la producción y consumo responsables.

• ODS 8 – Promocionar trabajo decente y crecimiento económico.

El equipo está compuesto por diez profesionales, gran parte del equipo miembros senior con más de 10 años de experiencia en mercados emergentes y/u operaciones financieras, y experiencia colectiva en financiación de más de 1 billón de dólares de deuda a corto plazo y transacciones comerciales de mercados emergentes:

Federica Sambiase – Founding Partner and CEO

Andrew Darling – Chief Structuring and Product Officer

Jorge Luis Cerna Coronado – Latam Origination and Relationship Management

Gathuo Njoroge - SS Africa Origination and Relationship Management

Ekaterina Kobzareva  - Investments Manager

Sara Isabella Piedrabuena  Designer. & Latinamerican Coverage

Gaëlle Bonnieux - Miembro de la Junta Directiva (No-Ejecutivo)

Guido Boysen - Miembro de la Junta Directiva (No-Ejecutivo)

Tineyi Mawocha se unirá al equipo como Miembro No Ejecutivo de la Junta Directiva

Puedes saber más sobre el equipo aquí.

El equipo

Federica Sambiase

Founding Partner and CEO

Federica Sambiase is a senior Banking & Finance professional with 20+ years of experience in originating, advising and structuring corporate finance solutions for global clients.

Andrew Darling

Chief Structuring and Product Officer

Andrew Darling is a veteran Trade Finance specialist with over 40 years experience of providing funding to Corporates across a broad spectrum of products.

Jorge Cerna Coronado

Latam Origination and Relationship Management

Jorge Cerna is an investment banking & finance professional with 10+ years experience in origination, structuring and relationship management of local and regional clients in Latin America.

Gathuo Njoroge

SS Africa Origination and Relationship Management

Gathuo Njoroge is a finance and technology expert with over 10 years experience in product development, research, origination and operations of SME and corporates finance solutions across East African and US markets.

Ekaterina Kobzareva

Investments Manager

Ekaterina Kobzareva is experienced and highly qualified Investment professional with 6+ years in financial analysis, due diligence and deal structuring (both Buy side and Sell side) across a number of different industries.

Sara Piedrabuena

Designer and Latinamerican Coverage

Modelo de negocio

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