Fairafric Ghana secures US$2.2m from DEG for establishment of a chocolate production plant

GHANA – Fairafric Ghana limited, Ghana’s first chocolate manufacturing company has secured a US$2.2 million loan from the German development finance institution, DEG to establish a new chocolate manufacturing plant in the West African nation.

Fairafric Ghana Limited is a subsidiary of the Munic based startup fairafric GmbH that was started in 2014 with the aim of producing the first made in Africa chocolate.

The startup went ahead to successfully launch its fairafric chocolates in 2016 that have since become popular especially in the German market.

The chocolates are currently produced in partnership with the Cocoa Processing Company which had the necessary machinery for chocolate making.

In the spring of 2019, family-run chocolate manufacturer Ludwig Weinrich KG from Herford, Germany, took a stake in the start-up with the aim of better managing the production process in Ghana and being able to meet the increasing demand for fair trade organic chocolate.

According to a press statement by DEG, fairafric intends to use the funds from the loan to set up its own production plant in Ghana, covering the process from cocoa harvesting to manufacturing and packaging.

The loan deal is part of the AfricaConnect program, an initiative of the German Federal Ministry for Economic Cooperation and Development to support companies investing in Africa.

It is also DEG’s first investment in Africa for 2020 and new commitments in high-potential sectors are expected during the course of the year.

Fairafric Ghana Ltd. is creating more than 80 jobs. In addition, the company is obtaining the cocoa beans from 5,000 small farmers, enabling them to earn higher incomes for themselves and their families.

The loan was granted through DEG’s AfricaConnect program.  Through the program, DEG has been offering European companies a new financing product for investments in Africa since the summer of 2019.

Companies also benefit from direct access to DEG’s Africa expertise and its network.

“We are focusing particularly on companies with a long-term interest in Africa that want to create positive added value locally,” said Petra Kotte, Head of the Financial Institutions and German Business Division at DEG.

“Fairafric is a good example of this, because by expanding the value chain in Ghana the company is helping to create skilled jobs locally,” Kotte noted.

“Although 70% of the world’s cocoa harvest comes from West Africa, the countries there only receive a fraction of the sales generated through chocolate.

By producing locally, ten times more money can flow into the country compared to simply exporting the cocoa beans,” added Hendrik Reimers, founder and CEO of fairafric.

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