Right from the moment that father and son Nick and Nicolas Grooss set eyes on the Welgevonden reserve in South Africa, they were sold. This was exactly what the entrepreneurs were looking for: “a farm already producing and with plenty of development potential”. Since 2016 they have been transforming 550 hectares of land into a major macadamia nut farm: WelMac. An investment in solar panels, linked to the irrigation and fertilization system for the company’s nut trees, provides a sustainable energy solution. It greatly reduces water consumption and ensures a better and bigger harvest.
WelMac stands for Welgevonden Macadamia. The nut farm lies in the scorching sun of Limpopo Province, in the north-east of South Africa. The land here is rugged, the nature of the African bush untouched, and the flora and fauna of breath-taking beauty. When Nick and Nicolas Grooss bought the farm, the 60 hectares were already planted with macadamia trees as well as mangos, lychees and guavas. But because of the potential of macadamia, they decided to focus exclusively on this particular nut. Macadamia is a natural product that can be used in various ways and to which all sorts of health benefits are attributed. The nut is said to be good for the heart and veins and to reduce cholesterol.
View of the farm and the WelMac site in South Africa, where a solar park has been built with the help of the DGGF.
Nicolas Grooss explains: “Macadamia has great potential for growth. At present, macadamia nuts account for a tiny portion, 1 or 2 percent, of the whole nut basket, as it is called. Cashew and pistachio nuts, by contrast, have carved out a large niche for themselves in the basket. Macadamia is an emerging product. We expect that it will not only become more established on the food chart but also increasingly turn up in shampoos and creams in the form of macadamia oil.”
“The DGGF loan enabled WelMac to build a solar park. Batteries and solar panels now supply us with the necessary power.”
Nicolas GroossCo-owner of WelMac
The business, based in the Netherlands and South Africa, got off to a slow start. Extreme drought resulted in a disappointing harvest, and the nation-wide electricity shortages didn’t help either. “We installed an efficient and smart irrigation system on the farm that saves a huge amount of water — up to 70 percent compared to an earlier system. The system also ensures customized fertilization so that each tree receives exactly the nourishment it needs. A fine example of precision farming. We had installed this when the utility company began load shedding. For part of the day no power was supplied, simply because it wasn’t available. We’d no electricity. So we had to search for a sustainable alternative to the generators that ran on diesel,” adds Nicolas Grooss.
WelMac creates over 100 local jobs in South Africa. Some 70 percent of employees are female.
That forced WelMac to search for an alternative, sustainable source of energy. In a country where the sun almost always shines, an investment in solar panels seemed a logical choice. But securing the necessary funding proved a tough challenge. A Dutch bank could not issue a loan, in part because the assets of WelMac – almost all of which are registered in South Africa – could not be provided as collateral. Other drawbacks included the high-risk profile attached to investments in African countries, the size of the loan and the long lead-time before macadamia trees start to earn money.
Nick and Nicolas Grooss tell on entrepreneurship and how WelMac entered the sustainable macadamia market. A podcast from Grenzeloos Ondernemen (in Dutch).
And so WelMac came into contact with the Dutch Good Growth Fund (DGGF), one of the funds used by Invest International. The company was eligible for a DGGF subsidy loan of 2.75 million EUR. The money will be repaid over a number of years at a certain interest rate.
Investment Manager Stan Janssen of Invest International: “As a Dutch company, WelMac creates local employment and knowledge transfer, and it is committed to protecting the surrounding Welgevonden nature reserve. In addition, besides improving the quality and quantity of the harvest, the system with which the company had already experimented saves water. That made it eligible for a loan through the fund. And, of course, we’re also helping a Dutch company and the Dutch economy in this way.”Read more about DGGF and how it might help your business
“Over time, WelMac expects to operate at a CO2 negative level because of the amount of CO2 absorbed by the huge number of trees.”
Nicolas Grooss explains that the loan has enabled WelMac to “build a complete solar park” and that they can now operate “off grid”. “Batteries and solar panels supply us with the necessary power. And, importantly, we can expand modularly as our operation grows over time. We want to plant more hectares and build a processing facility. Everything can be powered by the solar park that we’ve built with the help of this loan.”
Over time, WelMac expects to operate at a CO2 negative level because of the amount of CO2 absorbed by the huge number of trees. Emissions are limited to the tractors used on the land and the electricity now comes from solar panels.
Investing in macadamia is all about the long haul. It takes seven to ten years before a macadamia tree produces nuts.
Do you want to explore co-financing for a sustainable idea? Then please contact us! We can assist you in tackling and financing comparable challenges abroad.