Opportunities In Cashew Processing Sub-sector In Ghana
Cashew is a tropical crop that grows well in all kinds of soil types. It is known to do well even in poor, semi-arid and transitional geographical zones. It grows well in areas with annual total rainfall of between 900 mm and 1,400 mm and with distinctive wet and dry seasons. In Ghana cashew nut in shell [raw cashew nut] is the leading Non-Traditional Export earner after processed cocoa.
The global cashew market has seen significant growth in recent years. It is estimated that the market grows between 7-10% annually, thus creating different opportunities along the cashew value chain. Adoption of healthier lifestyles, particularly in Europe and America has boosted the consumption of cashew, hence expansion of the market.
In the next sections are some of the opportunities in the cashew value chain in Ghana.
Industrial Job Creation
The surge in demand for cashew kernels and other products across the globe translates into corresponding supply increase. To meet the year-on-year-on demand, processing factories must also increase production and productivity which will eventually create more employment opportunities.
USIBRAS Ghana Limited which has a processing capacity of 30,000 MT, processes between 15,000 to 20,000 MT and employs 600 people. Should the company scale up production to its optimal capacity, it is likely to increase workforce to over 1,000.
Also, Defunct Kona Agro processing Ltd. is seeking investment partners to reopen the factory in soonest time. The expected revived company is estimated to create 500 direct jobs in the first year and increase to 1,000 in the subsequent years when production increases. From the information gathered, about 80% of the workers would be women.
Farm Growth and Development
The impact of a competitive cashew processing sector would ultimately increase the demand for raw nuts. Amidst an increase demand for raw material, producers (farmers) would be required to expand production and productivity to satisfy the needs of processors by expanding existing farms, replace old and non-productive trees and create new farms.
This will also increase the incomes of farmers and farm workers as well. Currently many people are going into cashew plantation in major cashew producing areas. The people of Afram Plains North district are also venturing into cashew production hitherto, they were not producing cashew.
Foreign Direct Investment
Cashew processing is a profitable venture. If cashew processing is properly structured and well-positioned in the country’s agribusiness space, it would become an attractive investment venture for prospecting investors across the globe.
The sub-sector has gross margins range between 30-40% with return on investment achieved within 3-5 years (ISS, 2014). It remains a viable avenue that authorities should utilize to attract more foreign direct investment.
Support for Sector
The GIZ Competitive Cashew initiative [GIZ/ComCashew], an international development project in the cashew value chain has opted to support some of the cashew processing companies.
It has been assisting processors with capacity building in the areas of access to finance, market entry training, quality management with regards to sourcing and warehousing of raw cashew nut [RCN] as well as good manufacturing practices.
In the quest to address the challenge of access to finance, four processing companies have been assisted with the development of business plans. GIZ/ComCashew is currently profiling concessional finance providers in a bid to source funding for cashew processors.
The concessional finance is expected to bridge the gap between the present state of small-scale cashew processors and their ability and eligibility to take on commercial finance.
In order to improve upon efficiency, GIZ/ComCashew is also working around the clock to upgrade the equipment of six local processors. Kabile Cashew Farmers’ Cooperative Company, Nimdee Hyren Company Limited, Nafana Agro Processing Company Limited, Agroking Limited, Gensap Ventures and Innov. Organic Limited are the beneficiary companies of GIZ/ComCashew support to the industry.
In conclusion, there exist many opportunities in the cashew sub-sector which need to be exploited, It gives room for all investors [home and abroad] to come to Ghana and invest in the cashew industry in order to harness its full potentials. It is also important to mention that the above stated opportunities are not the only opportunities that exist in Ghana but there are several of them.