With Cordaid’s investment, Leecon Poultry Enterprise was able to double its layers, grow the business, employ more people and improve efficiency. Now Leecon provides other smallholder farmers with affordable, high-quality feed which would otherwise be unobtainable for them.
Egg consumption in Sierra Leone is estimated at 200 million eggs annually. However, local production is still small, covering only 20% of the demand. The rest is covered by imports. Cordaid Investment Management believes in the potential of the poultry sector and has financed local poultry farmers to increase their share of the market. One of these companies is Leecon Poultry Enterprise.
In 2003, Bai Bureh Conteh, founder of Leecon, started activities in the poultry sector using all his savings. He started with a small scale farm, with only 700 birds. The business has grown gradually with consistent reinvestment of profits to the business. But this type of growth has its limits.
“It is quite challenging and expensive to import feed from overseas, especially for small farmers”, Bai Bureh Conteh explains. “Instead they go for local substitutes that lack the nutrition content necessary to attain a high production efficiency. As a result, Sierra Leone’s poultry sector struggles to access finance to grow and develop.”
Depreciation of the local currency is also a major challenge. “Businesses that depend on imported inputs struggle to be profitable. If you are trading in Leones a devaluation of the Leones against hard currencies negatively impacts the cost of production. And the need for working capital increases”, he continues.
Cordaid Investment Management supported Leecon with a loan in local currency to grow the business. Before the investment from Cordaid, Leecon had 15,000 layers. This has increased to 30,000 after the investment.
“My loan contract with Cordaid is in local currency”, says Bai Bureh Conteh. “But I received the funds in foreign currency equivalence so I can pay my foreign suppliers directly. This helped to mitigate foreign currency risks I was exposed to when sourcing inputs.”
Cordaid Investment Management's loan has helped Leecon tackle their challenge of accessing long term growth capital. The loan will also help to create employment opportunities. The number of Leecon employees is expected to grow from 25 to 34 people, of which the vast majority is youth.
Leecon also provides quality feeds to small farmers who cannot afford to import large quantities of inputs at affordable prices. This will not only improve profit margins for farmers. It will also help them offer competitive prices for their products.
Bai Bureh Conteh: “Cordaid Investments’ loan has been really helpful, it has helped grow my business. I have employed more people as a result of the funds. It has also helped to improve production efficiency in my farm.”