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    Pearl Capital Partners (Pearl) has recently concluded an investment of KSh 200 million (US$ 2,300,000) in the Kenyan potato processor Midlands Limited through the African Agricultural Capital Fund (AACF).

    Midlands is a large scale potato handling and processing business located in the potato growing region of South Kinangop. Potato farmers in Kenya have faced numerous challenges in marketing their production. Most of these challenges are a result of inadequate investment in post-harvest handling of potatoes throughout the country. Through the initial shareholders’ investment, the Company has over the last five years developed the physical infrastructure necessary to improve potato storage facilities and also invested in processing capacity. By partnering with AACF, Midlands will complete its capital expenditure programme, invest in operational management and self-finance its working capital requirements.

    Pearl’s investment of KSh 200 million is equally split between debt and equity, providing Midlands with a capital structure appropriate to its needs.

    Commenting at the conclusion of the transaction, Mr Wainaina, Chairman of Midlands said: “The Board is delighted to have Pearl invest in the business. We are confident that, with this investment, we will be able to grow the business and improve both the quality and output of potatoes in central Kenya. We will also be developing processed potato products that will successfully compete with imports.”

    Representing Pearl, the partner responsible for the investment, Wanjohi Ndagu, said. ‘Again, Pearl affirms its commitment to the growth of agribusiness and agro-processing in East Africa. As a fund manager focused on the agriculture sector in the region, we remain committed to providing risk capital that should improve the opportunity for market access to small scale farmers. In Midlands we have found a partner completely aligned to our objectives. The success of Midlands should go a long way in reshaping, for the better, the livelihoods of small scale potato farmers in South Kinangop and Kenya in general’

    Irish potatoes are the second most important staple food crop in Kenya, after maize. Demand for potatoes is stable all year around particularly among urban households and food establishments, but there has been no guarantee of quality and quantity. Midlands is addressing this market weakness by providing a substantial increase in potato storage capacity. With regard to product development, Midlands is producing vacuum packed whole peeled potatoes, French fries and bhajias. The business also intends to supply mashed potatoes and whole unpeeled potatoes to the market.