Description

The goal of this campaign is to fund a family-owned company based in the coastal area of the Guayas Province (Ecuador), specializing in the aggregation, processing and sale to Europe and North America of conventional cocoa beans and semi-finished products (Liquor, Butter and Powder).

The Company was established in 1996 by a local entrepreneur and it has become one of the leading national exporting companies of Ecuador's fine aroma cocoa, as well as special semi and premium gourmet chocolates - with an industrial process "bean to bar", and names of the traceable origin of the geographical areas most representative of fine aroma cocoa-producing in Ecuador.

With its two Plants in the Guayas and Los Rios provinces, the Company has a total of 20,000MT export capacity per year. 

Given the increasing presence of multinationals as well as local competition, the company invested in operations automation, mechanization and product diversification to become more efficient and competitive. By using high-end technology machinery specially made for the cocoa sector, it duplicated the volume of production and exports; reduced labour risk; the reduced time between the preparation of lots; improved homogeneity and quality of beans; reduced the percentage of human error throughout the stages of production; controlled production costs; improved quality. In addition, the Company implemented full automation of the entire factory, allowing management of all processes from a computer, laptop, or tablet.

The Company’s mission is to export the best fine Ecuadorian cocoa beans and their derivatives to the world, promoting fair trade with small producers and traders, and integrating the whole agro productive cocoa chain with international markets assuring high-quality standards and responsibility for human resources of the company and care of the environment.

The Company sources its produce from 2,500 cocoa farmers and is focused on improving their productivity and quality controls through two Private Sponsored programs, which benefit 5,000 families, as follows:

• A Program based on Quality, Traceability and Sustainability that offers farming communities technical assistance and training to improve productivity; advice and support for improving the quality and post-harvest; training to develop management, financial and trading capacities in communities: fairtrade practices to improve life quality in the communities. The goal is to establish a traceability system to guarantee the trace information of cocoa beans in each one of the processes, from production, postharvest handling and distribution. The Company works with a group of small-scale producer associations in this program.
• A sustainable project to improve the productivity of small producers of cocoa and to enhance their quality of life by using such tools as technical training and delivery of agricultural inputs. The main objective of the program is to obtain a fine flavoured cocoa grain with less fat and more flavour with the sponsorship of the Government of Sucumbíos (Cocoa Region) and in coordination with the main small farmers' associations. As of today, 680 cocoa producers enrolled in this program.

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 flavoured cocoa beans is 20% to 30%.

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 two 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 tenth 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.

The Impact

Direct:

• Improve the financial health of smallholder producers: through providing the organization with transactional working capital, 2.500 small Ecuadorian cocoa farmers can have the needed liquidity required for a stable production process.
• Improve smallholder productivity: through providing technical and organic and fair-trade certifications assistance, training, education, social and health support to the farmers and their families, the Company promotes improved working conditions and access to an international export value chain to small producers, who own less than two hectares of land.

Indirect:

• Reduction of rural poverty: 2.500 smallholder farmer families will receive a higher profit margin for their produce, which can be allocated to more than pure subsistence.
• Promotion of organic and fair-trade production: part of the cocoa produced is organic and certified by a third party. The working capital enables support from the Company to the farmers seeking organic and fair-trade certifications. Also, the Company promotes sustainability initiatives that reach 5.000 families.
• Contribution to environmental protection: the Ecuadorian 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

856

people impacted

Contribution to the Sustainable
Development Goals

Sustainable Development Goals

Financial viability

Download Key Investment Information Sheet

The Promoter

About WCA (Working Capital Associates) LLP

WCA is the only female-owned and led company providing direct financing to value chains of agriculture products from Sub Saharan Africa (SSA) and Latin America (Latam).

WCA follows a themed responsible investment approach which “allows investors to address ESG issues by investing in specific solutions to them, such as renewable energy, waste, and water management, sustainable forestry and agriculture, health products and inclusive finance” (PRI).

The company follows two key themes:

The company also applies gender-lens to its investments, seeking to finance a significant level of female-led businesses that follow sustainable and responsibly managed standards.

WCA’s goal is to grow value chains by providing access to finance to SMEs, in the framework of three keys SDGs:

• SDG 2 - End hunger, achieve food security, and promote sustainable agriculture.
• SDG 12 - Ensure sustainable consumption and production patterns.
• SDG 8 - Promote inclusive and sustainable economic growth, employment, and decent work for all

The company also applies a “No Harm” Impact Goal, when reviewing its investment opportunities and applying a negative screening to harmful/controversial products and industries.

The team is composed of ten professionals, with senior executive team members having 10+ years of experience in Emerging Markets and/or Trade Finance, and a collective experience in financing over USD1 billion in short-term debt and Emerging Markets transactions.

The team

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

Business Model

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