First investment in nicafrance in nicaragua

News - 1/29/2015

Edmond de Rothschild Group is investing in Cafetalera Nicafrance SA (“Nicafrance”), a Nicaraguan agroforestry company specialized in the production of high-quality shade-grown coffee and timber for high-end applications. The investment will allow the company to bolster its forestry businesses and develop a cluster of small and medium-sized specialty coffee growers.

Nicafrance was founded in 1992 by Mr Clément Marie Ponçon, and has successfully developed one of the largest coffee farms in Central America. It is a unique example of an agroforestry system combining coffee plantations with around ten local and precious tree species. The company has benefited in particular from a vast research programme supported by CIRAD, a French research centre and a leader in tropical agronomy. The programme is aimed at developing coffee varieties which are resistant to diseases such as rust and nematodes, suited to shade, high-yielding and which have superior flavour.

This programme will be stepped up, allowing the company to further enhance its technical excellence. Nicafrance is also benefitting from the development of a related forestry industry making the best use of the plantation’s rare species (e.g. in furniture making, eco-lodges, etc.).

This investment marks the beginning of a long-term partnership. It will specifically target the development of a renovation programme for farms severely hit by rust and the effects of global warming in the Matagalpa region of Nicaragua. This programme will enable the construction of a cluster of top-quality coffee farmers producing around 5,000 tonnes per year for roasters targeting sophisticated consumers in Europe, the US and Asia. Nicafrance already supplies large international roasters and leading coffee brands.

Setting up 1,700 hectares of agroforestry systems with small and medium-sized coffee growers will improve the resilience of a region facing the consequences of global warming. We estimate that the project will make it possible to store 127,000 tonnes of CO2 and will generate higher incomes for coffee growers, thus reducing poverty whilst helping create up to 6,000 sustainable new jobs.

Moringa’s technical partner, ONFI (the international subsidiary of the French national forestry office of Edmond de Rothschild Group), will contribute its know-how in forestry management. ECOM, a leading global coffee trader with a strong presence in Nicaragua, will provide its network and experience of partnership with the coffee growers.

Hervé Bourguignon commented:

“Nicafrance is an example of an investment project which proves that it is possible to have financial performance requirements while also having a direct positive impact on the environment and poverty reduction. An innovative financing system has been set up for the agroforestry plantations, which could be replicated across all of Central America.”

Clément Ponçon, Chief Executive Officer of Nicafrance, added:

“This deal provides a link between the small and medium-sized coffee growers of Nicaragua and socially responsible investors such as Edmond de Rothschild Group . With the COP 21 just a few months away, we hope this may serve as a model and a platform for new investments in agroforestry projects with a positive impact on climate in the coffee sector, as well as in cocoa, livestock and other areas.”