Kayeigorma Company Report _Final

REPORT TO THE SHARE AND STAKE HOLDERS OF THE KAYEIGORMA COMPANY LIMITED IN SIERRA LEONE (FIRST ANNUAL GENERAL MEETING (AGM) HELD IN KENEMA ON JULY 29 2011)

Theme: Empowering Small Holder Cocoa Farmers for World Market Trade

AANN IINNIITTIIAATTIIVVEE SSUUPPPPOORRTTEEDD BBYY TTHHEE GGOOVVEERRNNMMEENNTT OOFF SSIIEERRRRAA LLEEOONNEE’’SS RRUURRAALL AANNDD PPRRIIVVAATTEE SSEECCTTOORR DDEEVVEELLOOPPMMEENNTT PPRROOJJEECCTT FFIINNAANNCCEEDD BBYY TTHHEE WWOORRLLDD BBAANNKK UUNNDDEERR TTHHEE IINNTTEERRNNAATTIIOONNAALL DDEEVVEELLOOPPMMEENNTT AASSSSOOCCIIAATTIIOONN ((IIDDAA)) FFUUNNDDIINNGG FFOORR LLOOWWEESSTT IINNCCOOMMEE CCOOUUNNTTRRIIEESS

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TTaabbllee ooff CCoonntteennttss

IInnttrroodduuccttiioonn

CCoommppaannyy AAccttiivviittiieess

BBooaarrdd ooff DDiirreeccttoorrss

OOppeerraattiioonnss

PPrrooffiitt aanndd LLoossss

BBoonnuuss

CCeerrttiiffiiccaattiioonn

CCooooppeerraattiivvee AAccttiivviittiieess

MMuunnaaffaa CCooccooaa FFaarrmmeerrss CCooooppeerraattiivvee

TTeegglloommaa CCooccooaa FFaarrmmeerrss CCooooppeerraattiivvee

KKaassiiyyaattaammaa CCooccooaa FFaarrmmeerrss CCooooppeerraattiivvee

PPoolliittiiccaall SSttrruuccttuurree

FFiinnaanncciinngg

IInntteerrvveennttiioonnss

OOppeerraattiinngg PPrriinncciipplleess

AAttttaacchhmmeennttss

CCoommmmeennddaattiioonn LLeetttteerr ffrroomm NNoobbllee RReessoouurrcceess

QQuuoottee oonn CCooccooaa ffrroomm aa GGoovveerrnnmmeenntt TTrraaddee SSttuuddyy DDooccuummeenntt

LLiisstt ooff AAwwaarrdd WWiinnnneerrss

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IInnttrroodduuccttiioonn

he Kayeigorma Company Limited (KCL) was established on 16th of July 2010. This was done with the financial and technical support from the Government of Sierra Leone’s

Rural and Private Sector Development Project (RPSDP) financed by the World Bank under the International Development Association (IDA) funding window for low income countries.

The Rural and Private Sector Development Project was designed to promote the production and marketing of specific agricultural crops which included cocoa. In its support to the cocoa sector which started in February 2010, the RPSDP undertook an initial assessment of cocoa marketing prospects across the country with the view of identifying potential areas for intervention. The recommendations contained in the report of the study led to the support for the formation and operation of three cocoa farmers’ cooperatives in Sierra Leone’s eastern region cocoa producing districts of Kenema, Kono and Kailahun. These cooperatives came together to form the marketing company called Kayeigorma Company Limited (KCL).

The company was formed to complement and complete the full cocoa value chain development process for the cocoa farmers from production to export. It thus helped the farmers to avail themselves of direct benefits accruing from the export of quality cocoa beans.

KCL is fully registered with the Office of the Registrar General and has also obtained cocoa and coffee export license from the Ministry of Trade and Industry.

It is currently majority-owned by the three (3) cooperatives - Munafa, Tegloma and Kasiyatama. Each cooperative has twenty percent (20%) shares and the workers of the company have ten percent (10%) shares. The remaining thirty percent (30%) shares are reserved to be bought by either the cooperatives or any strategic Investor having farmers interest at heart or both.

T

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A C T I V I T I E S O F T H E C O M P A N Y

II.. BBooaarrdd ooff DDiirreeccttoorrss

Members of the first Board of Directors of the Kayeigorma Company Limited include Mr. John

Foday Kamara (chairman), Sylvester Abdulai (member), Sahr Musa Mattia (member), Mr. Abdul

Salim (member), Mr. Patrick Abdul (member), and Madam Titi Gobio (member), Mr. Brima

Foday (Secretary). In attendance with the Board are Mr. Kwabena Ohemeng‐Tinyase

(Consultant), Mr. Usif Rahman Sesay (Company Accountant), Mr. Tamba Dalton Kassoh, Mr.

Francis Sumaila, and Mr. Lansana Dumbuya District Field Operations Officers for Kenema,

Kailahun and Kono respectively. The Rural and Private Sector Development Project provided the

initial support for the formation and operations of the company among which are:

Establishment of the company‐Formation and Registration

Securing of Export License

Engaging staff and needed expertise to support the farmers in the running of the company

Financing of the rehabilitation of sectional stores to facilitate cocoa trading

Providing tools of trade for the operations of the company

Providing the much needed working capital to help the farmers to trade

Supporting‐ The building of the capacity of the farmers in trading in business areas including

basic business management practices, quality cocoa processing techniques, basic records

keeping.

IIII.. OOppeerraattiioonnss

The company is owned by (3) three cooperatives in Kenema, Kailahun and Kono through its

branches in the districts with a total membership of 12,657 made up of 10067 and 2590 male

and female cocoa farmers, respectively. The company in the year under review purchased a

total of 314,316.800 lbs of cocoa, approximately 2,245.120 bags equivalent to 140.320 tons of

first grade quality cocoa beans. Details are as shown in the table below.

AREA LB BAG TON

KENEMA 120,444.800 860.320 53.77

KAILAHUN 114.419.200 817.280 51.08

KONO 79,452.800 567.520 35.47

GRAND TOTAL 314,316.800 2,245.120 140.320

The company has Noble Resources of Switzerland as its main importer. Noble Resources

commended KGL for KGL’s ability to export excellent grade (1) one quality cocoa during the

year. Please find attached a copy of the commendation.

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IIIIII.. PPrrooffiitt aanndd LLoossss

The company went through a successful trading year and the audited account reveals a total

profit of (Le251,415,146.250) Two hundred fifty‐one million, four hundred and fifteen

thousand, one hundred and four‐six Leones and two hundred and fifty cents. If it is apportioned

proportionate to the contributions of the cooperatives the position stands at:

NO COOPERATIVE PROFIT(LE)

1 Munafa Cocoa Farmers Cooperative 90,979,764.57

2 Tegloma Cocoa Farmers Cooperative 87,631,273.64

3 Kasiyatama Cocoa Farmers Cooperative 72,804,108.04

4 GRAND TOTAL 251,415,146.250

IIVV.. BBoonnuuss

In light of the above, the Board of Directors of the company proposed a share of profit to each

and every farmer of the cooperatives based on cocoa supplied to the company. The bonus

declared for payment is one hundred and fifty Leones (Le150) per pound (lb) of cocoa a farmer

sold to the company.

II.. CCeerrttiiffiiccaattiioonn

The company has not linked the cooperatives to any certification body yet. There are plans to

link the cooperatives to the Fair Trade Labeling Organization (FLO). The year ahead will see us

moving in that direction.

Kayeigorma

Tegloma

Munafa Kasiyatama

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BELOW: COCOA PRODUCTION PER DISTRICT: SEPTMBER 2010 – JANUARY 2011

BELOW: COCOA SALES PROFIT PER COOPERATIVE: SEPTMBER 2010 – JANUARY 2011

120444.8 860.32 53.77

114419.2 817.28 51.08

79452.8 567.52 35.47

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

POUNDS BAGS METRIC TONS

KONO

KAILAHUN

KENEMA

MUNAFA36%

TEGLOMA35%

KASIYATAMA29%

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A S P E C T S O F T H E C O C O A V A L U E C H A I N I N P I C T U R E S

Above: Harvesting

Above: Seed Extraction before Fermentation

Above: Drying

Above: Moisture Testing

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C O C O A C O O P E R A T I V E S I N A C T I O N

Above: Cocoa Summit in Kailahun

Above: Kasiyatama Cooperative Farmers in Kono District

Above: Munafa Cooperative Farmers in Kenema District

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A C T I V I T I E S O F T H E C O O P E R A T I V E S

II.. MMuunnaaffaa CCooccooaa FFaarrmmeerrss CCooooppeerraattiivvee ((KKeenneemmaa DDiissttrriicctt))::

Munafa in the local Mende dialect means “Our Benefit”. The farmers selected the name as a

sign of their strong will and determination to improve on existing state of affairs.

The cooperative was established in May 2010. It is registered with the Cooperative Societies Act

1977 and the kenema District Council.

It has a membership of 5,628 made up of 4,805 males and 823 females.

The farmers are farming a total acreage of 20,500.

Munafa operates in six (6) chiefdoms and in twenty‐four (24) sections.

There are four sections in each of the chiefdoms listed below:‐

NO CHIEFDOM SECTIONS

1 Gorama Mende Kaklawa

Famajo

Kuallay

Biaton

2 Malegohun Konjo Buiima

Upper Torgboma

Lower Torgboma

Hunlurhun Njagor

3 Lower Bambara Gbo

Sei

Korjei Ngieya

Korjei Buiima

4 Gaura Sandaru

Mendekelema

Kokoru

Giebu

5 Dama Lower Dabor

Upper Dabor

Fowai

Dakowa

6 Nongowa Dagbanya

Kagbado Ngiegbla

Dakpana

Kona Foiya

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IIII.. TTeegglloommaa CCooccooaa FFaarrmmeerrss CCooooppeerraattiivvee ((KKaaiillaahhuunn DDiissttrriicctt))::

Tegloma Cocoa Farmers Cooperative is an association of cocoa farmers in Kailahun District.

Tegloma in Mende language means “going forward” or “development”.

It was established in April 2010 in the District capital, Kailahun.

It is legally registered with the Kailahun District Council, the Ministry of Agriculture, Forestry and

Food Security in the district and with the Sierra Leone Department of Cooperatives.

It has a membership of 4585 of which 942 are women and 3144 are men.

The farmers have about 4,000 acres of cocoa plantation.

The cooperative is operating in five (5) chiefdoms and twenty (20) sections in Kailahun district.

The details are shown in the table below.


1 Luawa Monfidor

Baoma

Mende

Buiima

Upper Bombali

2 Upper Bambara Golu

Bambara,

Ngoliewoma

Guma

3 Dea Bailawa

Sienga

Dodo

Sakeima

4 Yawei Kuivawa

Kuiva Njagor

Kuiva Buiima

Bendu Buiima

5 Pege Bongre Mano

Seimaya

Bongre

Jorwu

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IIIIII.. KKaassiiyyaattaammaa CCooccooaa FFaarrmmeerrss CCooooppeerraattiivvee ((KKoonnoo DDiissttrriicctt))::

Kasiyatama in Kono means “thank God”

Kasiyatama cocoa farmers’ cooperative was formed with the support of the World Bank and the

Government of Sierra Leone through the RPSDP in April 2010.

It has a total membership of 2444 made up of 326 women and2118 men.

It covers the high cocoa producing areas of Kono District namely Soa, Fiama, Nimikoro, Sandor,

and Gbane chiefdoms.

The farmers have a total of 15,499.6 acres of cocoa under cultivation.

Kasiyatama cocoa farmers’ cooperative operates in five (5) chiefdoms and twenty (20) sections

of the district. It covers four (4) sections in each of the chiefdoms.

The details are shown in the first table on page 5.


1 Sandor Yawantanda

Njiekor

Sumunyifeh

Kawafeh

2 Nimikoro Njaiama Nimikoro

Masayifeh

Gbogboafeh

Bafifeh

3 Gbane Mongor

Kamara

Gbiekidakor

Mainkandor

4 Fiama Fiama

Dumbia

Kooka

Kooma

5 Soa Sawabuma

Sawafiama

Mongor

Tensekor

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IIVV.. PPoolliittiiccaall SSttrruuccttuurree

The three (3) cooperatives have similar political structures in line with model cooperative

principles. The registered membership is open to all cocoa farmers in their areas of operation.

There is free entry and exit.

Democratic practices are ensured at all levels of the political structure.

Members in each village of the sections constitute the Village Assembly of the cooperative.

They also have a three‐member elected executive and council made up of the Chairman, a male

leader and a female leader.

The Village Assembly is the basic grass root body that meets to deliberate on all issues of the

cooperative and the Village Executives carry views expressed and decisions taken to the

sectional level.

At the sectional level, there is a Sectional Assembly and a Sectional Executive Council. The

Sectional Assembly and the Sectional Executive Council are the second level political structure.

The Sectional Assembly includes a male and a female elected representative of the Village

Assembly, the chairman and one other person.

As an assembly it deliberates on all matters brought before it by members and the village

assemblies in the sections.

The Sectional Executive Council is a five (5) member’s elected body. It is the administrative

body of the section. It also acts as the mouth piece of the section.

The third level structure is the District Assembly and the District Executive Council. The District

Assemblies of the cooperatives are made up of two (2) representatives (a male and a female)

elected by the sections of the districts.

The district assemblies deliberate on matters of the cooperative in the district and they are the

final mouth piece of the district cooperative.

The District Executive Councils of the cooperatives are the final administrative units of the

institutions and act as such. It is a seven (7) member body. It has a Chairman, Vice Chairman,

secretary, Treasurer and three (3) other members.

The cooperatives have their approved constitutions that guide the running of the cooperatives.

Accountability and transparency are enshrined in the constitution.

The cooperatives have legal status of existence. They are registered with their respective

District Councils, Ministry of Agriculture Forestry and Food Security and the National

Department of Cooperatives.

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VV.. FFiinnaanncciinngg

Our main sponsor has been the World Bank and the Government of Sierra Leone through the

Rural and Private Sector Development Project.

The project engaged the Consultant who did the initial study that led to the establishment of

the cooperatives and has supported the establishment of the cooperatives and their operations

throughout to date.

International Fund for Agricultural Development (IFAD) has also supported Tegloma Cocoa

Farmers Cooperative of Kailahun District and Kasiyatama Cocoa Farmers Cooperative of Kono

District with loans.

A total of (Le262, 453,000) two hundred and sixty‐ two million, four hundred and fifty‐three

thousand Leones each was disbursed to support the two cooperatives. Munafa Cocoa Farmers

Cooperative of Kenema District is yet to receive their funding from IFAD.

The funds are towards the rehabilitation and development of 400 hectares each of aged cocoa

farms in the two districts of Kono and Kailahun.

Promoting Agriculture, Governance and Environment (PAGE) a USAID sponsored project has

also supported the three cooperatives to the tune of (10,000 US Dollars) from their Innovative

Grants Fund. The funds were used to support quality cocoa processing, capacity building,

raising of hybrid cocoa seedlings and general farmers capacity programs.

VVII.. IInntteerrvveennttiioonnss

Through the giants’ efforts of the RPSDP, the farmers have had a comprehensive

developmental package along the cocoa value chain. Among the interventions are:

The support for the establishment of three model cooperatives in the three districts of the

country

The support towards farmers capacity building at all levels of the cocoa value chain

including proposal writing, business plan writing, farm management practices, business

management skills, raising and management of good quality hybrid cocoa seedlings nursery,

group dynamics

The support to farmers business visit leading to the establishment of the Kayeigorma

Company as the main trading and export wing of the cooperatives whose first annual

general meeting we are holding today

The provision of expert technical knowledge to support the cooperatives in all their

deliberations

The support to obtain cocoa and coffee export license for the company to help peasant

cocoa farmers to export their own cocoa.

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VVIIII.. EEtthhiiccss aanndd PPrriinncciipplleess

All three cooperatives seek to operate based on good ethical practices that ensure gender and

youth inclusion, transparency and accountability, environmental sensitivity and capacity

enhancement.

The cooperatives ensure that whatever they do are done in a transparent, accountable,

consultative and democratic manner

The cooperatives ensure that women participate fully in their deliberations and that women

have equal chances with men in being elected to positions of trust.

The activities of the cooperatives also help the youth to be fully engaged. This provides a

check on the rural‐urban youth drift.

The cooperatives work against child abuse and encourage farmers to educate their children,

especially girls.

The cooperatives are also sensitive about environmental and sustainability issues.

Compliance with environmental protection policies of the government and international

protocols is among their guiding principles and ethics

The cooperatives promote capacity building efforts to plough‐back skilled human resources

that generate additional profits needed to continue capitalizing the business.

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Annex 1: Letter emailed from Noble Resources Commending Koyeigorma Company

From: Graham Laird [email protected]

Subject: Kayeigorma cocoa

To: Usif Sesay [email protected], Kwabena Ohemeng-Tinyase [email protected]

Date: Wednesday, February 23, 2011, 3:07 AM

Dear Kwabena/ Usif,

So far this season, we have bought a total of 75mt from Kayeigorma. Whilst this tonnage remains quite modest, I thought I would let you know that, on the quantities so far delivered, the signs are promising that your good efforts in producing good quality with the co-operatives are bearing fruit.

Indeed, of the cocoa so far delivered from your co-operatives, the quality and bean count show a vast improvement on the standards we have become used to receiving in Europe over the last few years: Sierra Leone cocoa has, sadly, won the dubious reputation of being one of the worst qualities in West Africa.

However, thanks to your good efforts with the co-operatives, the Sierra Leone cocoa from Kayeigorma is rapidly regaining the ground lost over many years of neglect. The quality and bean size in the cocoa delivered to us has been excellent, and our manufacturer customers are increasingly interested in seeing it as a suitable replacement for Ivory Coast and Nigeria cocoa. Only Ghana remains of a higher standard – perhaps with your continued good work, you will soon reach even those elevated levels!

You are breaking the vicious cycle in which Sierra Leone cocoa was finding itself: because of poor quality, farmers were receiving low prices which, in turn, gave them no incentive to improve the standard of their produce. With Kayeigorma’s good efforts, your superior quality will bring better prices from the world’s buyers. I can only encourage your farmers to continue on this virtuous path which should bring them prosperity.

Please extend my thanks and heartfelt congratulations to all of your farmers. I am aware that the past has been a troubled period for them all. However, cocoa used to be part of the lifeblood of Sierra Leone and I am thrilled to see that, because of their good efforts, their cocoa is moving back to centre-stage as a reference point for good, constant quality in Africa. Please urge them to keep up the good work!

Kind regards,

Graham

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Annex 2: Quote from the Ministry of Trade and Industries’ Diagnostic Trade Integration Study Completed in 2006 with Supports from the World Bank, UNDP, WTO, etc.

“Cocoa holds particular promise for fairly rapid growth in the next ten years which could bring direct benefits to more than 140,000 households, many of them very poor. It is already the most important agricultural export, in spite of negligible support. The experience of Cote d’Ivoire and Ghana offers ample proof of the cocoa potential. International market conditions remain sufficiently robust to absorb whatever Sierra Leone might produce for the foreseeable future, providing reasonable quality standards are met. And cocoa expansion could help absorb some of the labor which will be released from artisanal mining over the next ten years. As the Government’s capacity to drive agricultural export production is extremely limited for the moment, this study’s first and most important message is: get the cocoa sector working again”

Annex 3: List of Award Winners

Company Level Awards

Best Performing Cooperative: Munafa Cocoa Cooperative, Kenema

Best Enterprising Cooperative: Tegloma Cocoa Cooperative, Kailahun

Best Organised Cooperative: Kasiyatama cocoa cooperative, Kono

Most Efficient Cooperative: Kasiyatama Cocoa Cooperative, Kono

Best Performing Farmer: Sheriff A. Soko - Munafa Cocoa Coops

Best Performing Section: Kaklawa Section – Munafa Cocoa Coops

Most Active Female Farmer: Madam Mary Kaikai- Kasiyatama Cocoa Coops

Cooperative Level Awards

KENEMA Best Performing Chiefdom: Gorama Mende Chiefdom

Best Farmer: Sheriff A. Soko

Best Section: Kaklawa Section

KAILAHUN Best Performing Chiefdom: Kuiva Buiima Chiefdom

Best Farmer: Moriba Morie

Best Section: Yawei Section

KONO Best Performing Chiefdom: Nimikoro Chiefdom

Best Farmer: Komba Mondeh

Best Section: Mansayifeh Section

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ANNEX 4: ANNUAL GENERAL MEETING PROGRAMME: KENEMA, JULY 29 2011

NO ACTIVITY TIME RESPONSIBLE PERSONS

1 PART 1. – OPENING CEREMONY Opening Prayer

8.30 - 8.35am All

2

INTRODUCTION OF CHAIRMAN

8.35 – 8.40am Madam Mary Kaikai –Kasiyatama Cocoa Coops - Kono

3 Chairman – Remarks 8.40 – 8.45am Chairman

4 Introduction of Dignitaries

8.45 – 8.55am Sahr Musa Mattia

5 Welcome Address 8.55 – 9.10am Mayor, Kenema City Council

6

SPEECHES: a. Project Coordinator–Rural and Private Sector

Development Project (RPSDP)

9.10 – 9.25am

Peter M Kaindaneh

9.25 – 9.35am Patrick Caulker

b. Director – Sierra Leone Investment and Export Promotion Agency

c. Task Team Leader – Rural and Private Sector d. Development Project (RPSDP)

9.35 – 9.45am Charles Annor-Frempong

7 Keynote Address 9.45 – 10.00am Minister of Trade

TEA BREAK 10.00 -10.30.am

8

PART 11: BUSINESS OF THE DAY

Reading of reports: a. Cooperatives Report b. Kayeigorma Company Report c. Auditors Report

10.30 -12.30pm

John Foday

Sylvester Abdulai

Emile Kargbo & Associate

L U N C H 12.30 – 1.30pm

9 PART 111: - AWARD OF PRIZES –

a. Bonus prize to Munafa Cocoa Cooperative - Kenema

b. Bonus prize to Tegloma Cocoa Cooperative - Kailahun

c. Bonus prize to Kasiyatama Cocoa Cooperative – Kono

d. Individual prizes

1.30 – 2.30pm

Chairman, Kenema District Council

Chairman, Kailahun District Council

Chairman, Kono District Council Deputy Minister of Trade and Industry

10 Chairman’s closing remarks 2.30 – 2.45pm

11 Vote of Thanks 2.45 – 2.50pm Madam Mamie Caulker – Tegloma Cocoa Cooperative - Kailahun

12 Closing Prayer 2.50 – 3.00pm All

13 Refreshments 3.00pm All

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Date: July 18 2011

MMeeddiiaa AAddvviissoorryy FREETOWN JULY 18 2011:- The attention of the press is hereby drawn to an important groundbreaking event which will convene from 9:00am - 3:30pm on July 29 2011 in the main hall of the Government Secondary School in Kenema.

BACKGROUND: - The Government of Sierra Leone through the Ministry of Agriculture, Forestry and Food Security and the Ministry of Trade and Industries have been promoting activities that add value to the production and sale of agricultural commodities in the country.

As a result of this support, the Kayeigorma Company was established in July 2010 by three cooperatives formed in Kenema, Kono and Kailahun Districts through the support of the Rural and Private Sector Development Project (RPSDP) financed by the World Bank and administered by the Government of Sierra Leone through the above named ministries.

Since its establishment, the company is now having its first Annual General Meeting (AGM) on the theme “Empowering Small Holder Cocoa Farmers for World Market Trade” on the above stated date, time and venue.

The occasion will be chaired by Dr. Joseph Sam Sesay, Minister of Agriculture, Forestry and Food Security; and the Keynote Address will be delivered by Dr. Richard Konteh, Minister of Trade and Industries. Interested press houses wishing to cover the occasion are invited.

For further information please call Usif Rahman Sesay on +232 (33/76) 352558.

Kayeigorma Company Report _Final

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