November 1, 2005
U.S. Ambassador Michael L. Retzer visited the Premier Cashew Industries processing facility today, and attended a meeting of representatives of the largest cashew processing and trading companies in Tanzania – Olam International, Premier Enterprises, Mohammed Enterprises and Micronix. Officials at the meeting affirmed their commitment to continue to invest in Tanzania’s cashew processing industry to create jobs and increase the value of exported nuts.
Over the last year the Government of Tanzania worked with the Cashewnut Producers of Tanzania to develop and execute a joint Memorandum of Understanding (MOU) that contained an incentive package of reduced government taxes and levies, and a commitment from the processors to expand domestic processing. The MOU’s goal is to increase processing in Tanzania by 10,000 metric tons per year over five years. This would also result in 30,000 additional jobs and over $10 million in increased value of cashews exported over the life of the agreement.
As a direct result of this agreement, Premier Cashew reopened the production facility the Ambassador visited today, which now employs over 1,700 workers. During the event, Ambassador Retzer stated, “I am pleased that the Government of Tanzania and private sector have joined together, as partners, to create a better investment climate in Tanzania. And I am pleased that the American people will also be helping to support job creation and increased exports.”
Ambassador Retzer was referring to the recent agreement between the United States Agency for International Development (USAID) and the Ministry of Finance for $393,000 to facilitate local production and processing of cashew nuts. With these resources, USAID will support TechnoServe, a U.S. based non-profit organization that has facilitated a partnership between Olam International Limited, the world’s largest cashew trading company, Tanzanian processors, and the Government of Tanzania to optimize the growing, processing, and marketing of cashew nuts in order to expand local processing, develop more local jobs, and increase export earnings.
Building on the agreement, Olam International and TechnoServe will join together in a partnership, termed a ‘Global Development Alliance,’ to improve the productivity of small producers and increase yields and incomes in rural areas. They will also work with processor associations to improve the quality and the competitiveness of large and small semi-automated processors.
According to A. Shekhar, Senior Managing Director of Olam International Limited, “Olam’s partnership with TechnoServe is a natural extension of our approach to sustainability. Working together we hope to support the current Government and industry led initiatives and develop local solutions that will enable African producer countries to maximize the potential of their cashew industry for the benefit of all stakeholders, including smallholder farmers and local processors.”
Processed cashew nuts are high-value foods with strong demand from the American and European consumer markets. Africa currently produces one-third of the world’s raw cashew nuts, which provides cash income for millions of small-scale farm families, most of whom live in rural areas with limited natural resources, low agricultural potential, and high poverty levels.
Over 80% of Africa’s current production is exported in raw nut form to India or Vietnam for further processing, leaving small-scale African producers with a restricted export market, and limited profits from their produce. By processing the raw nuts in Africa, more jobs will be made available to Africans and foreign exchange earnings will rise. The creation of a local processing industry has challenges, however, including necessary investments in processing infrastructure, transfer of technology and learning about best practices in cashew processing, capacity building and skill development of workers, all of which requires significant resources and policy support from local governments.