Over
350,000
jobs for planters will be created or maintained in the value chain of agricultural projects financed by Proparco in 2015
SRI L ANK A — MA’s Foods, a processed foods manufacturer whose specialities are spices and coconut derivatives, has made a name for itself over the past three decades, not only in its home market Sri Lanka, but also abroad – in countries ranging from Japan to the Netherlands.

Sri Lanka has long been famous for such spices as cinnamon, pepper, cloves and nutmeg. Spices, along with spice derivatives and essential oils, still account for over 50% of the country’s agricultural exports. And in that market, MA’s Foods is one of the most respected names. Founded thirty years ago in Dambulla, a town near the island country’s largest plantations, MA’s Foods started out as a spice processing business with just five employees. The company gradually expanding its product portfolio to include preserved pickles, chutneys, curry paste, spice mixes and other items, with the result that it boasts five brands today. In 2006, coconut milk and powder were added to the roster. What began as a micro-enterprise has developed into a thriving firm with a workforce of 300.

To obtain the resources needed to ensure that expansion, founder Mario de Alwis turned to local and international investors and funding providers. The latest is Aavishkaar, a venture capital firm in India in which Proparco acquired a stake in 2015. It has invested $2.1m in MA’s (see box, p. 27). Mario de Alwis has successfully anticipated market expectations. In 2003, for example, his company was the first in Sri Lanka to win Safe Quality Food (SQF) certification for its food safety control system. Two years later, MA’s was certified as an organic food processor in the European Union and Japan. Subsequent certifications include FSSC 22 000 (food safety), ISO 14 001 (environmental management), OHSAS 18 001 (occupational health and safety), fair trade, organic agriculture (Europe, Japan, United States) and SEDEX (ethical trade).

She single-handedly runs her farm, where cinnamon trees and pepper plants grow at the foot of coconut trees. That diversification ensures a steady revenue stream all year long.

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Mrs. Shriyani is the secretary of the SafeNet sustainable agriculture planters’ association in the south of the island
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MARRYING BUSINESS WITH COMMUNITY SPIRIT
The other key ingredient in the company’s success is its choice of an inclusive business model, as Mario de Alwis explains. “Right from the start, we conceived of MA’s as a company connected to its environment – the people of Dambulla, the planters in the vicinity...” In his view, what makes MA’s different from other agribusiness companies in Sri Lanka are “local roots, taking the people we work with into account. Without that, you can gain a foothold in the market, but you can’t last. Some people in this industry forget that they owe their success first and foremost to the men and women who work for them. You can have the best technology and the best machines, but what ultimately counts are the planters who put their hands in the soil, the factory employees who select and prepare your products. If you miss that point, you miss what the business is all about.” At MA’s Foods, 50% of the employees are women. Two of them are managers and four are assistant managers (compared with seven men). For Mario, those numbers are a legitimate source of pride in a country where two out of every three women are not part of the labour force.
At its factories, MA’s Foods provides employees with free food and accommodations. In Dambulla, roughly a hundred of them are housed on the premises during the workweek. That policy costs money, of course, but it also helps put the factory’s operations on a more secure footing. For the employees as well, the benefits are considerable. Rents for a one-room flat in the area range from €40 to €60 a month, and monthly food bills are just as high – whereas most workers only earn between €100 and €300 a month.
Vues à 360° du projet MA'S FOOD au Sri Lanka
THE VALUE OF WORKING THE LAND
But that’s not all there is to the community involvement of MA’s Foods. The company gives precedence to sourcing from small farmers, and assists them with the adoption of socially responsible business practices. MA’s took the initiative in organising a network of planters committed to sustainable agriculture called SafeNet (Sustainable Agri-Farmers Enterprise Network). The goal is to help them meet international certification standards for free trade and organic agriculture. The company’s staff provides advisory service, technical assistance and training. Moreover, MA’s Foods covers the cost of certification. On the coconut plantations in the south of the island, the organic label has enabled SafeNet planters to sell a kilo of output for 300 to 400 rupees above the price for conventional coconut. Even so, Rajeewa Kularathna, the head of compliance at Dambulla, admits it can be an uphill struggle. “It’s sometimes hard to get farmers to change their practices and see the benefits of certification, particularly when you realise that it may take up to five years to get the Fairtrade label and two or three years to get organic certification.”
In supporting the organic agriculture trend in Sri Lanka and fair trade, the founder of MA’s Foods makes no secret of his desire to help restore farming to its rightful status. “As in other countries, farming has become unattractive here. Our young people are leaving the countryside. To them, farming is the last option, what you do when you’ve failed elsewhere. I’m worried about the future. Fifty years from now, we’ll have to feed three million more people. How are we going to manage that if no one wants to work the land? Sri Lanka is lucky enough to have the natural and human potential to go a long way towards meeting that challenge, but so far, there have been very few attempts to aggregate all the interested parties and develop a sustainable, nationwide agribusiness sector that serves the interests of our farmers, our economy and our country.” The response, claims Mario, is to try to give prior accomplishments a sustainable character. “After growing MA’s, we need to think about the next step. I won’t be around forever, so it’s important to me to attend to succession,” he says. And he’s already prepared the ground. His eldest son, Maliek, is the current CEO of MA’s Foods, and his youngest son, Sheran, is in charge of compliance.
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How fair trade works
Smallholders and workers located near the start of the value chain don’t always get a fair share of the wealth they help create. The Fairtrade system has set out to achieve greater equity in international trade. The minimum price determined on the basis of Fairtrade Standards covers the cost of production and provides farmers with a safety net at times when world market prices fall below a sustainable level. Farmers also receive a Fairtrade Premium that is put into a community fund to finance projects devoted to education, healthcare, increasing yields and the quality of farms.
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A FUND FOR MICRO- AND SMALL ENTERPRISES IN ASIA
Aavishkaar, or balance between social impact and return on investment
Founded in 2001, Aavishkaar (which means “invention” in Hindi) is India’s leading impact investment firm. It has over $150m under management through its five funds dedicated to providing capital (from $0.5m to $5m) to micro- and small enterprises operating in agribusiness, education, energy, healthcare, water and sanitation or working to promote financial inclusion.
Its vision and mission are to catalyse economic and social development while generating commercial returns. Aavishkaar investments have helped, for example, to create nearly 35,000 jobs and make affordable goods and services available to over 28 million people in rural and semi-urban areas. Those achievements have earned the company a number of awards, including the World Business Award, which in 2006 recognised Aavishkaar’s flagship fund (AIMVCF) as one of the top ten business models in the world working towards achieving the Millennium Development Goals (MDGs).
Encouraged by its success in India, Aavishkaar has moved on to replicate its “recipe” in South and Southeast Asia. Its new $45m fund, Aavishkaar Frontier Fund (AFF), was established to assist high-growth micro-and small enterprises in Pakistan, Bangladesh, Indonesia and Sri Lanka. In support of that aim, Proparco acquired a €6m interest in AFF in 2015. AFF made its first investment in Sri Lanka – providing $2.1m (300 million rupees) to help MA’s Foods roll out new products (vegetable oils and recipe mixes), increase its production capacity, above all for export, and open an additional coconut processing plant in the north of the country, a region torn by civil war between 1983 and 2009.
MA'S FOOD, SUSTAINABLE AGRICULTURE IN SRI LANKA / IMMERSION 360° PROPARCO

The Sri Lankan company MA’s Food was founded in 1986 and specialises in producing foods using spices and coconut. The company sources its food locally, preferably from smallholders whom it helps to adopt responsible farming practices, and employs at least 50% of women, many of them in management positions. In 2016, the Indian-based management fund Aavishkar – of which Proparco is a shareholder – invested 2 million dollars in MA’s food to enable it to continue to grow its business.

Sri Lanka Ma's Food