Situation
A leading Rwandan Holding Group had recently acquired the struggling pyrethrum refinery, SOPYRWA. The company was on the brink of bankruptcy arising from various historical issues and challenges predating its recent owners. International customer relations had deteriorated; erosion of regional production market share; financial challenges leading to strained relations and broken trust with critical farmer communities. One of only three refineries in the EAC region, and situated in a prime growing environment, the company has potential to play a major role in the global market for pyrethrum pale extract, where demand far exceeds available supply. In this context Karisimbi Partners was engaged to evaluate the company, key players, market, and critical dependencies to develop the necessary interventions to position the company for a profitable future.
Karisimbi Partners approach
Karisimbi Partners rapidly and thoroughly evaluated the company across three core areas: financial, operations, and sales to arrive at a comprehensive assessment and restructuring framework to put it back on the path to success. This process involved directly engaging management, staff, suppliers, customers and industry experts to provide a holistic analysis and set of recommendations outlining responsible parties, required timeline, and associated investments. KBP developed a deep understanding of the underlying challenges and historical barriers that that had plagued the company. A new vision and framework for collaboration across the value chain was created among relevant parties to achieve full market potential.
Results
Karisimbi Partners’ involvement led to a financial debt and equity restructuring plan enabling the company to meet the commitments to thousands of farmer suppliers and invest in higher yield plant material. This resulted in a flower production increase from 209 to 700 MT in one year. Export revenues increased by 380% and global market share grew from 6% to 15%. 8,000 farmer households have increased incomes and expanded land under cultivation in Rwanda and neighboring Democratic Republic of Congo. In addition to a return to profitable operations and positive customer relationships with the top global manufacturers of pyrethrum based products, SOPYRWA is developing its own value-added products for the local region via a joint venture with an U.K. based industry partner.
Eugene Haguma, CEO for parent company Horizon Group: “Karisimbi Partners has become a strategic ally. They have provided a tremendous amount of professional advice and worked on important strategic projects…beating the expectations of all stakeholders involved.”
