Kennemer Group

Business model

Kennemer is a Filipino agri-sourcing platform that produces and markets high quality agricultural products. It specializes in the sustainable growing, sourcing, and trading of different crops and is the Philippine’s leading supplier of cacao beans to the international market. At the core of its inclusive business model is the grower program, which the company developed as a way to source adequate supplies of high-quality produce from smallholder farmers. Kennemer worked with more than 19,000 farmers, to increase yields and improve income, and planted more than 20 million cacao trees.

The grower program business model of Kennemer is focused on providing services to and sourcing from crop-producing smallholder communities in various regions in the Philippines. Initially focusing on cacao, the grower program is an end-to-end value chain solution for smallholder farmers centered on the provision of financing coupled with on-the-ground support for farmer communities. This includes the provision of access to financing, high-quality farm inputs, technology transfer and ongoing support via a network of trained field supervisors and farmer entrepreneurs, coaching and monitoring of farmers’ performance and access to global markets, with guaranteed off-take.
Crops produced by Kennemer, and the famers they source from, are net carbon positive: the gains from improved practices and rehabilitation efforts exceed the carbon losses of the production.

Kennemer’s Ag technology platform aims to ‘digitize’ farms and farmer management, allowing the company to scale up and better manage risks by bringing complete farm data, product traceability and impact metrics to farmers, buyers, financiers, and investors.

Investment

Purpose: The LDN Fund investment in Kennemer allows for an expansion of sustainable farming operations, farmer financing and supports an ambitious carbon program.

Type and amount: The investment in this project consists of a loan of 14mln USD.

Duration: 9 years.

© Kennemer Foods International

Technical assistance

• To accommodate the increased complexity of the operations, with expansions planned in two locations in the Philippines, Kennemer will grow its Environmental and Social Management System (ESMS). The LDN TAF supports Kennemer to develop a solid ESMS framework, ready to carry the company’s growth;
• To support Kennemer in accessing and structuring their current ‘landscape approach’ with the objective to scale their operations in an inclusive, deforestation and land degradation free way. Landscape-approach TA for investments is aimed at facilitating and strengthening relationships between the project operator and local communities, public authorities, NGOs, local private actors, and other landscape stakeholders, towards a common land use vision and shared action plan balancing needs to sustainable production and income with social inclusion and natural resources protection;
• To support Kennemer to further build on their understanding of gender dynamics within its organization, to develop an ambitious gender equality strategy and identify intervention opportunities to implement this strategy;
• To build internal knowledge and capacity to maximize the environmental impact of their current approach and explore additional opportunities for interventions to expand the project’s Climate Program;
• To assess current sustainable farming practices and protocols in order to identify key areas for improvement;
• To support the development of the updated investment strategy for Agronomika (farmer financing subsidiary), define the profile of an ideal strategic investment partner, identify potential partners and facilitate investment raise;
• To assess the living income and living wage gaps for the value chains and locations Kennemer is operating in, and to develop a strategy to close these gaps;
• To develop a company-wide impact monitoring and reporting framework that enables Kennemer to report to its different stakeholders.