Africa-focussed agriculture and forestry company Obtala announced on Wednesday that it signed a letter of intent expressing the company's commitment to build sustainable and inclusive business in Tanzania through investment activities associated with the 'Grow Africa' partnerships in Sub-Saharan Africa.
The AIM-traded firm said the Grow Africa partnership was founded jointly by the African Union, The New Partnership for Africa's Development and the World Economic Forum in 2011.
It said Grow Africa worked to increase private sector investment in agriculture, and accelerate the execution and impact of investment commitments.
"Our commitment is to Grow Africa which is promoting multi-stakeholder collaboration to advance private sector investment aligned to the Government of Tanzania's agricultural development objectives, as well as the Government of Tanzania's commitment to promote a business enabling environment that provides confidence to both the domestic and international private sector to achieve these objectives," Obtala's board explained in a statement.
Obtala currently employed around 400 people and was actively seeking new partnerships to scale its operations through infrastructure upgrades, extension of its farms and development of agreements with surrounding farms.
Intense planning was reportedly underway for several major projects in Tanzania as the company transitioned towards meaningful production, and deployment of its substantial assets.
Addressing the issues of food security and nutrition, economic development and social impact, and environmental sustainability through waste reduction would be priority, Obtala's board claimed.
Under the letter of intent, Obtala conditionally committed to investing $10m over the coming five years in a new modular packhouse facility, housing of staff and training centres, scaling plantation based activities and the development of an outgrower programme, subject to sourcing of matched funding, grants, preferential loans and equity from donors, development finance institutions and impact investors.
To advance that commitment over the next 12 months, Obtala said it would take a number of actions, including investing in the first stage of a modular packhouse facility to meet increasing demand from local markets, Kenya and the Middle East.
It would also engage partners for co-financing the further expansion of the packhouse, development of the outgrower scheme, staff housing and training centres, as well as identify local and regional partners for technical assistance to identify and build capacity at local surrounding farms.
Obtala additionally committed to collaborate with local and international universities for the upskilling, training and development of farm managers and the development of a talent pipeline, to engage local organisations to deliver community engagement activities in health and nutrition, and to further develop national and international distribution networks.
"Obtala intends to progress our projects in Tanzania with the collaboration and partnership of the Government of Tanzania," said chairman Miles Pelham.
"The project is consistent with the investment priorities identified by the country-led Comprehensive Africa Agriculture Development Programme investment plans.
"In particular, this project aims to contribute to Tanzania."
Pelham said the company welcomed the Government of Tanzania's intent to support the investment with mechanisms for coordination with private sector, farmers, and across government entities, that would be required for a "sound and sustainable" policy, regulatory, administrative and enabling environment.
"We further welcome development partners to provide appropriate technical and financial support to accelerate implementation, helping to build policy and provide funding or grants, with the overall goal of facilitating private investment.
"We at Obtala are committed to be part of the agricultural transformation of Tanzania and look forward to building a long and lasting relationship with the farmers, the government, the donors, the private sector, and other players in Tanzania.
"Accordingly we are pleased to submit this letter of intent to support and accelerate the development of Tanzania's agriculture and to improve the lives of Tanzania's farmers and citizens."