Country: Peru
Sector: Coffee, cocoa and whole brown sugar (panela)
Investment: Construction of a new warehouse, next to existing processing facilities of the three business lines
Total estimated capital expenditure: USD 1.400.000
Investment type: 7-year subordinated loan
Amount invested by Kampani: USD 540.000
Co-financiers: Local banks
In portfolio since: July 2022
The business
Norandino is an established multiple services agricultural cooperative located in Piura, with a history dating back to 2005. Its main product is coffee (70%), followed by cocoa and panela which together represent 30% of its annual sales. Norandino has approximately 6,000 members through its 12 member cooperatives. Its main objective is to improve the business aspects of its member organisations and thus help improve living conditions. In 2021, it ranked 7th in Peru in terms of coffee exports, shipping 5,109 metric tons for the year.
The investment
In July 2022, Kampani provided a subordinated loan of USD 540K to Norandino to finance the construction of a new warehouse which will more than double Norandino’s storage capacity to 6,000 metric tons. At present Norandino has to store coffee outside in the open air, with a risk of quality loss in case of rain, and in rented warehouses around Piura. Further capacity to house coffee in proper conditions is urgently needed. The new warehouse will allow Norandindo to maintain coffee quality for at least five months, improving the offer to coffee buyers and leading to efficiencies in production and commercial processes.
The social impact
Norandino has a strong commitment towards improving the livelihoods of its smallholders and caring for the environment.
Norandino’s members are smallholder producers with an average of 3 hectares of land each. They have different yield profiles depending on where they are located and whether or not they use irrigation techniques. Farmers receive commercialising and processing services for their coffee, cocoa and panela. These services are also provided to 25,000 producers that are not members of Norandino. Additionally, Norandino provides training for its members to maintain/obtain certifications such as organic, and fairtrade, and has programs in place to further include women and youth in agriculture.
In cooperation with other social actors, Norandino joined an action plan in 2010 to fight climate change and reforest the mountain range of Piura. The actors facilitate the sale of carbon offsets and carbon credits in order to restore biodiversity and reforest the Andean zones that have been deforested, allowing for the recovery of water basins and biodiversity throughout the region. To date this plan has managed to reforest 528 hectares, ranking it as one of the most important initiatives in the northern regions of Peru in terms of compensation for carbon capture. Close to 900 families have already benefited.
