Company ProfileCHC Commodities Ltd

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CHC Commodities Ltd is a Zambian agricultural service provider whose primary business is warehousing, buying and brokering of agricultural commodities. CHC’s m ain focus is on grain storage and handling, processing of agricultural commodities, financing crop production and supply of agricultural inputs.

The implementing partner on this project is Griffin Services Limited, a subsidiary of CHC Commodities registered in 2018. Griffin sells agricultural supplies such as seed, fertiliser, agrochemicals, veterinary supplies and agricultural machinery and parts through an online web shop and physical depots. 

Project Description

Smallholder farmers in Zambia struggle to access high quality agriculture inputs, agricultural equipment and extension services due to lack of financial resources and large distances between farmers and agricultural service suppliers. Over 80% of smallholder farmers in Western province grow maize farmers and the majority lack access to inputs and extension services. This has a severe negative impact on yields and incomes.

With support from EZCF, CHC Commodities Ltd seeks to address these challenges through the following solutions:

1. Introducing the one-stop-shop model in remote districts:
   CHC Commodities, through its implementing partner Griffin, aims to introduce a one-stop-shop model in remote districts of Western and Southern Provinces. The Project will establish 4 depots in Western province and 6 depots in Southern province. For each depot, 10 commission-based agents will be recruited and serve as a link between the web shop, depots and the rural communities. The agents will place orders on behalf of farmers and deliver the products within 3 days using motor bikes. Farmers will be able to access inputs on credit and equipment (solar pumps and bio digesters) using a Pay as you go (PAYG) system.

1. Providing crop marketing services:
   The network of depots created will be used to offer crop marketing services to smallholder farmers. The project targets to reach 19,000 farmers who will access crop marketing services, of which 5,000 will be in an out-grower Scheme and will contracted to supply sorghum, groundnuts and millet by the end of the project (through pre-approved prices and inputs on credit). The agents will aggregate crops, including sorghum, groundnuts and millet from smallholder farmers using containers, testing equipment and weighing scales provided by the project partners. CHC/Griffin will train 60 commission-based agents in produce testing and buying; and provide market price information to farmers through text messaging.

1. Farmer sensitisation and training:
   To ensure that farmers know how to use their purchased products and how to improve their farm practices, the project partners will provide extension services and organise training activities for all 19,000 farmers. Farmers will be given trainings in production of specific crops like sorghum, Millet and groundnuts using climate smart agriculture technology.

Product, Market and Competition

1. The produce sourced by Griffin from smallholder farmers will be bought off by CHC Commodities. Griffin is projected to source 9,030 MT of agricultural produce per annum from year 3 of project onwards. In terms of input supply, Griffin projects to sell inputs worth EUR 520,000 per annum from year 3 of the project in the mentioned remote areas.
2. The depots created will also serve as an outlet for climate smart products such as solar pumps and bio digesters worth EUR 260,000 per annum from year 3 of the project.
3. In terms of market prospects, the project partners have an agreement with some feed manufactures, Breweries and milling companies who buy produce from CHC.