IFC jointly backs Westfalia Fruit

Johannesburg, South Africa, April 6, 2023— To support the growth of the avocado industry in Africa, Asia, South America, and Europe, IFC, HSBC Bank, and Standard Bank today announced an investment in Westfalia Fruit International Limited to help the company expand sustainable avocado production at its existing facilities and explore opportunities in new markets.

IFC, HSBC and Standard Bank have each invested $100 million for a combined $300 million investment in South Africa's Westfalia, supporting its strategy to develop new orchards and nurseries in Colombia, India, Mexico, Mozambique, Peru, and South Africa. Westfalia also plans to upgrade its packing, ripening and storage facilities in Africa, South America, and Europe to improve access to markets.

As part of its strategy to become carbon neutral by 2030, Westfalia will continue to introduce climate smart growing techniques that conserve energy and water and reduce pesticide use. Westfalia will also use drought and disease resilient varieties to address the impact of climate change.

"The investment will enable 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," said Alk Brand, Group Chief Executive Officer, Westfalia Fruit Group. "The partnership with IFC, HSBC and Standard Bank will contribute to our efforts to enhance sustainable farming practices, create jobs in the communities where we operate and support economic growth."

Westfalia has one of the world's largest avocado-growing footprints and will explore investments in new markets, such as China, India, Italy, Kenya, Spain, Tanzania and the United States, to better integrate the avocado sectors in developing countries into the global value chain to meet growing demand for avocados.

"Developing sustainable avocado markets can help boost agriculture productivity to reduce poverty, especially in rural areas where people mainly work in farming," said Adamou Labara, IFC Country Manager for South Africa. "IFC's investment in Westfalia will help increase avocado production to meet growing demand, strengthen global value chains and boost economic growth in developing countries."

"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," said Danny Goldblum, Head of Large Corporates Coverage, London & South Region at HSBC UK. "We also look forward to seeing the business continue its sustainability efforts and meet its net zero targets in 2030."

"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," said Clive Potter, Head of Client Coverage South Africa at Standard Bank. "This deal will adequately support Westfalia's strategic ambitions by allowing the business to retain its leading global avocado producer status and grow in markets where there is opportunity for growth."

The global avocado market is estimated at $7 billion by value of trade. The market is dominated by countries from sub-Saharan Africa and Latin America who mainly produce avocados to feed into the two largest consumption markets, North America and Europe, and meet the growing demand for the fruit.

The investment will help Westfalia to further develop and promote the avocado industry in existing and new markets with potential for growth, will help create jobs and will ultimately contribute to the growth of the agriculture sector and sustainably meet the global demand for avocados.