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Starch Production

Restructuring & Vertical Integration


A Nigerian starch manufacturer was unable to supply its customers because of a lack of working capital and raw materials. The factory’s capacity utilization was low, and it was forced to source cassava for processing from distant and unreliable suppliers. As a result, the company’s customers had to rely on imported starch to meet their requirements for food and pharmaceutical production.

Actions Taken

Project Capital’s team assessed the market for starch and diagnosed the company’s key challenges. The team proposed several actions for optimizing the plant’s sourcing of raw materials, and reached agreement with an international farm management company to integrate the growing of cassava to meet the factory’s production requirements. The team also assisted the company to obtain orders from major customers including Nestle, Unilever, and FanMilk. In addition, the team prepared a plan to refinance and restructure the existing debt in order to create a sustainable capital structure. Based on the comprehensive farming, logistics, and marketing plan, Project Capital+ was able to restructure the financing of the company’s operations to complete its turnaround, raising additional capital at favorable terms.


  • The team obtained total financing of $12.5 million for the company; $6.5 million in new financing dedicated to the acquisition of farming machinery, fertilizers and chemicals, and working capital, and $6 million for refinancing existing debt, with an extension of the tenor to a 10-year repayment with an additional moratorium to provide breathing room.

  • The team secured an interest rate of 9% on new financing and 7% on refinancing, both well below the Nigerian prime lending rate of 19% at the time.

  • Based on the financing and expert management, capacity utilization more than doubled - from 37% to over 80%.

  • Professional farm managers dramatically increased the yield of cassava on the company’s own farmland.

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