Taking a closer look at investable agri-food businesses in Nepal

As part of its work to develop investment in the agri-food sector in Nepal, CASA took 8 investors to meet the management team of Paicho Pasal. The company is looking for £2m of investment to expand into new provinces.

The investors praised the approach, piloted by CASA, to facilitate an investor tourism mission. On this mission they visited two investment-ready businesses in the vegetable value chain. Visiting the factory and processing centres and meeting the management and leadership team, helped the investors to learn what needs to happen to scale the business up, nationally and even internationally.

“Investment decisions are driven by the numbers. There has to be a strong business case,” Alvaro Valverde of CASA explains. “However, as a result of the tourism mission, the investors expressed that they are keen to adopt the pre-assessment of the business, supported by CASA. They are also planning to review the limitations for investment from their funds. The investors had different outlooks and investment priorities. Some investors were interested in the company as a whole, others the processing element of the business, or specific business lines.

Paicho Pasal is an agribusiness conglomerate. It already operates at some scale in a number of value chains and with a broad range of product lines, that wants to scale up even further. They worked with the CASA Nepal team for nearly two-years to develop the systems and processes required to make them investment ready. This included work on internationally recognized quality assurance systems that opens the way for the company to export it branded sauces, pickles and other produce.

Alvaro Valverde of CASA said “Paicho Pasal’s business model is rooted in sourcing from smallholder farmers locally through a network of collections centres. This has helped the company to build a very strong reputation in all the areas where it operates. The company is willing to buy everything that the smallholders produce; it doesn’t matter if it is 2 kgs of an indigenous vegetable or 100 kgs of tomatoes. This approach, combined with the possibility of bartering raw agricultural goods for processed foods, ensures the loyalty of farmers to the firm.”

The company has well developed markets for fresh produce. They supply raw materials to other specialist food producers, for example they supply over 80% of the soybean used by manufacturers of noodles in the country.

Paicho Pasal has also become very skilled at processing produce into ketchup, pickles and other products. This has helped the company to reduced 40% of the waste in some value chains. Paicho Pasal branded food products are being distributed across Nepal. They sold 300,000 bottles of chilli ketchup in one month at the beginning of the COVID pandemic.

Alvaro Valverde concluded: “The innovative investment tourism approach has captured people’s interest. I am very hopeful that this will lead to investment in Paicho Pasal in the short or medium term. This approach, which was made in Nepal will also be influencing our approach to facilitating investment in agri-food systems in other countries in Asia and Africa.”

On their return to Kathmandu the investors will join around 100 other stakeholders for the Nepal Agriculture Investment Meeting on 8 December.

CASA Nepal will continue to work with vegetable and dairy value chain enterprises and support further activity to encourage investment.

Currently  investors only back about only about 2% of the agri-food investment proposals that are submitted to them. This CASA process can support a much more effective route to finance for investment-ready agri-food businesses.

More information on the Nepal Agriculture Investment Meeting:

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