Marcel Klooss of Vivienne Court visited our Get in the Ring Africa regional final last September 2014. That’s where he met Rwandan entrepreneur and coffee supplier Kamitatu Kayobotsi. On behalf of Vivienne Court, he is currently cooperating with and investing in mr. Kamitatu’s business KAMG Trading and Coffee Export. We interviewed Marcel about the investment process so far.
Can you tell us a bit more about Vivienne Court and your impact investment practices?
Vivienne Court is a trading firm based in Sydney, Australia. The setup of the company is that it has no shareholders but is owned by a foundation. Half of the profit of the firm goes to the foundation. The foundation looks for projects to invest in where the dollar impact is high and where ideally VivCourt can add something more in terms of management support. As we just started it is a completely new area for Vivienne Court where we have no experience at all, so we are excited to learn along the way but also expect things to go wrong in ways we have no idea of yet. Everything is already very different in our current setup with KAMG than we initially thought it would be.
How did you get in contact with Kamitatu Kayobotsi?
BiD Network invited me to Get in the Ring Africa in Kigali, Rwanda, last September. During the event, I spoke to a lot of different people and entrepreneurs, including Kamitatu Kayobotsi: a Rwandan coffee supplier in need of investment. I visited his factory to learn more about his business. He seemed to have the right profile to match our foundation’s purpose.
How has the investment process been going so far?
Back in Australia I stayed in touch with Kamitatu via email and phone, but due to bad reception and reachability it was difficult to have in-depth conversations about his business plan and financials. During the due-diligence with his buyers we discovered KAMG was missing working capital. I decided to return to Rwanda to have a close look at how things are going within the company and to support KAMG in the investment needed. We started with providing a small loan, and after that we went through the coffee cycle to evaluate the process and to check the margins, the quality of the coffee, see how the relationship with the suppliers and the buyers is etc. BiD Network’s matchmaking team supported in the process and looked with Kamitatu and me at the financials.
What challenges did you face?
I just returned from spending two months in Rwanda. Initially, I would be there for a month, but everything in the process went so slow that I ended up staying longer. One of the challenges turned out to be management’s lack of competence in some aspects of the business, such as operational procedures. That’s why in the end we do not only provide him a loan for working capital, but also offer support in the organization of his business and in helping him with external contacts. Now, I am taking responsibility for doing business with buyers and we keep in close contact about management, staff and operational matters. I expect to return to Rwanda in about three months to see how things are going on the ground.
Why did you choose to invest in this business?
For a great part it was based on feeling; what metrics can we apply with our lack of knowledge and experience? As mentioned, this is the first time we are doing this. We have to start somewhere to see how it turns out. We did have a preference for a trading company as that’s where our expertise is in, so KAMG made a great fit.
What do you aim to achieve with this investment?
We aim to make KAMG profitable, and that with a part of the profit we can provide the employees with a raise in income.
Besides this investment, what are other plans for Vivienne Court’s foundation?
We want to invest in similar ventures in the region of East Africa – that’s most practical since I’m already going there anyway. For now, we focus on ‘classic’ trading businesses.
KAMG is a Rwandan coffee supplier of green Arabica coffee beans based in Gitarama, south-western region of the country. Coffee is the country’s number 1 export and the government strongly supports growth in this sector. The company is currently one of the top 10 Rwandan exporters with aims to be the country’s primary coffee exporter within five years. As part of the social business model, KAMG will give back half of the profits to the farmers and villages down the value chain, by providing agronomist training and giving away the occasional village cow or goat.