South Africa and Egypt: Karsten Farms Illustrates South-South Cooperation

IFC made a rand-denominated loan equivalent to $7.24 million in FY2006 to Karsten Farms, a leading South African producer of table grapes. The firm is using the loan to expand its operations in South Africa and establish grape farming operations in Egypt. This reflects a trend in foreign direct investment by emerging market firms, known as south-south investment.

African companies investing in other countries across the region gain by diversifying their risk exposure and developing experience in other markets. IFC’s investment in Karsten also supports the continued growth of a successful firm, allowing it to increase capacity, diversify its production base, and work towards year-round operation.

• In addition to providing financing, IFC is helping the company implement community programs for HIV/AIDS, adult literacy, skills training, and health care.

Karsten is the technical partner in a black economic empowerment project, the Thandi program, which is a joint effort between IFC and Capespan, South Africa’s premier fruit exporter, to help black South African farmers. Working with a farm involved in the program, Karsten is sharing its technical skills and marketing experience with small farmers, upgrading the quality of grapes for export, and training other Africans in international standards for quality control and handling fruit.

For more information contact:

Houtan Bassiri
Communications Officer
Johannesburg, South Africa
Tel: +27-11-731-3179
Email: hbassiri@ifc.org