REPORT TO THE SHARE AND STAKE HOLDERS OF THE KAYEIGORMA COMPANY LIMITED IN SIERRA LEONE

(FIRST ANNUAL GENERAL MEETING (AGM) HELD IN KENEMA ON JULY 29 2011)

Theme: Empowering Small Holder Cocoa Farmers for World Market Trade

AN INITIATIVE SUPPORTED BY THE GOVERNMENT OF SIERRA LEONES RURAL AND PRIVATE SECTOR DEVELOPMENT PROJECT FINANCED BY THE WORLD BANK UNDER THE INTERNATIONAL DEVELOPMENT ASSOCIATION (IDA) FUNDING FOR LOWEST INCOME COUNTRIES

TableofContents
Introduction
CompanyActivities BoardofDirectors Operations ProfitandLoss Bonus Certification CooperativeActivities MunafaCocoaFarmersCooperative TeglomaCocoaFarmersCooperative KasiyatamaCocoaFarmersCooperative PoliticalStructure Financing Interventions OperatingPrinciples Attachments CommendationLetterfromNobleResources QuoteonCocoafromaGovernmentTradeStudyDocument ListofAwardWinners

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Introduction

T
by

he Kayeigorma Company Limited (KCL) was established on 16th of July 2010. This was done with the financial and technical support from the Government of Sierra Leones World Bank under the International Development

Rural and Private Sector Development Project (RPSDP) financed the Association (IDA) funding window for low income countries. The Rural and Private Sector Development Project was designed to promote the production and marketing of specific agricultural crops which included cocoa. In its support to the cocoa sector which started in February 2010, the RPSDP undertook an initial assessment of cocoa marketing prospects across the country with the view of identifying potential areas for intervention. The recommendations contained in the report of the study led to the support for the formation and operation of three cocoa farmers cooperatives in Sierra Leones eastern region cocoa producing districts of Kenema, Kono and Kailahun. These cooperatives came together to form the marketing company called Kayeigorma Company Limited (KCL). The company was formed to complement and complete the full cocoa value chain development process for the cocoa farmers from production to export. It thus helped the farmers to avail themselves of direct benefits accruing from the export of quality cocoa beans. KCL is fully registered with the Office of the Registrar General and has also obtained cocoa and coffee export license from the Ministry of Trade and Industry. It is currently majority-owned by the three (3) cooperatives Munafa, Tegloma and Kasiyatama. Each cooperative has twenty percent (20%) shares and the workers of the company have ten percent (10%) shares. The remaining thirty percent (30%) shares are reserved to be bought by either the cooperatives or any strategic Investor having farmers interest at heart or both.
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ACTIVITIESOFTHECOMPANY
I. BoardofDirectors

MembersofthefirstBoardofDirectorsoftheKayeigormaCompanyLimitedincludeMr.John FodayKamara(chairman),SylvesterAbdulai(member),SahrMusaMattia(member),Mr.Abdul Salim (member), Mr. Patrick Abdul (member), and Madam Titi Gobio (member), Mr. Brima Foday (Secretary). In attendance with the Board are Mr. Kwabena OhemengTinyase (Consultant), Mr. Usif Rahman Sesay (Company Accountant), Mr. Tamba Dalton Kassoh, Mr. Francis Sumaila, and Mr. Lansana Dumbuya District Field Operations Officers for Kenema, KailahunandKonorespectively.TheRuralandPrivateSectorDevelopmentProjectprovidedthe initialsupportfortheformationandoperationsofthecompanyamongwhichare: EstablishmentofthecompanyFormationandRegistration SecuringofExportLicense Engagingstaffandneededexpertisetosupportthefarmersintherunningofthecompany Financingoftherehabilitationofsectionalstorestofacilitatecocoatrading Providingtoolsoftradefortheoperationsofthecompany Providingthemuchneededworkingcapitaltohelpthefarmerstotrade SupportingThebuildingofthecapacityofthefarmersintradinginbusinessareasincluding basic business management practices, quality cocoa processing techniques, basic records keeping. Operations

II.

The company is owned by (3) three cooperatives in Kenema, Kailahun and Kono through its branchesinthedistrictswithatotalmembershipof12,657madeupof10067and2590male and female cocoa farmers, respectively. The company in the year under review purchased a totalof314,316.800lbsofcocoa,approximately2,245.120bagsequivalentto140.320tonsof firstgradequalitycocoabeans.Detailsareasshowninthetablebelow. AREA KENEMA KAILAHUN KONO GRANDTOTAL LB 120,444.800 114.419.200 79,452.800 314,316.800 BAG 860.320 817.280 567.520 2,245.120 TON 53.77 51.08 35.47 140.320

The company has Noble Resources of Switzerland as its main importer. Noble Resources commended KGL for KGLs ability to export excellent grade (1) one quality cocoa during the year.Pleasefindattachedacopyofthecommendation.
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III.

ProfitandLoss

The company went through a successful trading year and the auditedaccount reveals a total profit of (Le251,415,146.250) Two hundred fiftyone million, four hundred and fifteen thousand,onehundredandfoursixLeonesandtwohundredandfiftycents.Ifitisapportioned proportionatetothecontributionsofthecooperativesthepositionstandsat: NO 1 2 3 4 COOPERATIVE MunafaCocoaFarmersCooperative TeglomaCocoaFarmersCooperative KasiyatamaCocoaFarmersCooperative GRANDTOTAL PROFIT(LE) 90,979,764.57 87,631,273.64 72,804,108.04 251,415,146.250

IV.

Bonus

Inlightoftheabove,theBoardofDirectorsofthecompanyproposedashareofprofittoeach and every farmer of the cooperatives based on cocoa supplied to the company. The bonus declaredforpaymentisonehundredandfiftyLeones(Le150)perpound(lb)ofcocoaafarmer soldtothecompany. I. Certification

Thecompanyhasnotlinkedthecooperativestoanycertificationbodyyet.Thereareplansto linkthecooperativestotheFairTradeLabelingOrganization(FLO).Theyearaheadwillseeus movinginthatdirection.

Munafa

Kasiyatama

Tegloma

Kayeigorma
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BELOW:COCOAPRODUCTIONPERDISTRICT:SEPTMBER2010JANUARY2011
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% POUNDS BAGS METRICTONS 120444.8 860.32 53.77 114419.2 817.28 51.08 79452.8 567.52 35.47

KONO KAILAHUN KENEMA

BELOW:COCOASALESPROFITPERCOOPERATIVE:SEPTMBER2010JANUARY2011

KASIYATAMA 29%

MUNAFA 36%

TEGLOMA 35%

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ASPECTSOFTHECOCOAVALUECHAININPICTURES

Above:Harvesting

Above:SeedExtractionbeforeFermentation

Above:Drying

Above:MoistureTesting
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COCOACOOPERATIVESINACTION

Above:CocoaSummitinKailahun

Above:KasiyatamaCooperativeFarmersinKonoDistrict

Above:MunafaCooperativeFarmersinKenemaDistrict
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ACTIVITIESOFTHECOOPERATIVES
I. MunafaCocoaFarmersCooperative(KenemaDistrict):

Munafa in the local Mende dialect means Our Benefit. The farmers selected the name as a signoftheirstrongwillanddeterminationtoimproveonexistingstateofaffairs. ThecooperativewasestablishedinMay2010.ItisregisteredwiththeCooperativeSocietiesAct 1977andthekenemaDistrictCouncil. Ithasamembershipof5,628madeupof4,805malesand823females. Thefarmersarefarmingatotalacreageof20,500. Munafaoperatesinsix(6)chiefdomsandintwentyfour(24)sections. Therearefoursectionsineachofthechiefdomslistedbelow: NO CHIEFDOM
1 GoramaMende

SECTIONS
Kaklawa Famajo Kuallay Biaton KonjoBuiima UpperTorgboma LowerTorgboma HunlurhunNjagor Gbo Sei KorjeiNgieya KorjeiBuiima Sandaru Mendekelema Kokoru Giebu LowerDabor UpperDabor Fowai Dakowa Dagbanya KagbadoNgiegbla Dakpana KonaFoiya

Malegohun

LowerBambara

Gaura

Dama

Nongowa

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II.

TeglomaCocoaFarmersCooperative(KailahunDistrict):

TeglomaCocoaFarmersCooperativeisanassociationofcocoafarmersinKailahunDistrict. TeglomainMendelanguagemeansgoingforwardordevelopment. ItwasestablishedinApril2010intheDistrictcapital,Kailahun. ItislegallyregisteredwiththeKailahunDistrictCouncil,theMinistryofAgriculture,Forestryand FoodSecurityinthedistrictandwiththeSierraLeoneDepartmentofCooperatives. Ithasamembershipof4585ofwhich942arewomenand3144aremen. Thefarmershaveabout4,000acresofcocoaplantation. Thecooperativeisoperatinginfive(5)chiefdomsandtwenty(20)sectionsinKailahundistrict. Thedetailsareshowninthetablebelow.

NO 1

CHIEFDOM Luawa
Monfidor Baoma Mende Buiima UpperBombali Golu Bambara, Ngoliewoma Guma Bailawa Sienga Dodo Sakeima Kuivawa KuivaNjagor KuivaBuiima BenduBuiima Mano Seimaya Bongre Jorwu

SECTIONS

UpperBambara

Dea

Yawei

PegeBongre

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III.

KasiyatamaCocoaFarmersCooperative(KonoDistrict):

KasiyatamainKonomeansthankGod KasiyatamacocoafarmerscooperativewasformedwiththesupportoftheWorldBankandthe GovernmentofSierraLeonethroughtheRPSDPinApril2010. Ithasatotalmembershipof2444madeupof326womenand2118men. ItcoversthehighcocoaproducingareasofKonoDistrictnamelySoa,Fiama,Nimikoro,Sandor, andGbanechiefdoms. Thefarmershaveatotalof15,499.6acresofcocoaundercultivation. Kasiyatamacocoafarmerscooperativeoperatesinfive(5)chiefdomsandtwenty(20)sections ofthedistrict.Itcoversfour(4)sectionsineachofthechiefdoms. Thedetailsareshowninthefirsttableonpage5.

NO CHIEFDOM SECTIONS 1 Sandor

Yawantanda Njiekor Sumunyifeh Kawafeh NjaiamaNimikoro Masayifeh Gbogboafeh Bafifeh Mongor Kamara Gbiekidakor Mainkandor Fiama Dumbia Kooka Kooma Sawabuma Sawafiama Mongor Tensekor

Nimikoro

Gbane

Fiama

Soa

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IV.

PoliticalStructure

The three (3) cooperatives have similar political structures in line with model cooperative principles.Theregisteredmembershipisopentoallcocoafarmersintheirareasofoperation. Thereisfreeentryandexit. Democraticpracticesareensuredatalllevelsofthepoliticalstructure. Members in each village of the sections constitute the Village Assembly of the cooperative. TheyalsohaveathreememberelectedexecutiveandcouncilmadeupoftheChairman,amale leaderandafemaleleader. TheVillageAssemblyisthebasicgrassrootbodythatmeetstodeliberateonallissuesofthe cooperative and the Village Executives carry views expressed and decisions taken to the sectionallevel. At the sectional level, there is a Sectional Assembly and a Sectional Executive Council. The SectionalAssemblyandtheSectionalExecutiveCouncilarethesecondlevelpoliticalstructure. The Sectional Assembly includes a male and a female elected representative of the Village Assembly,thechairmanandoneotherperson. As an assembly it deliberates on all matters brought before it by members and the village assembliesinthesections. TheSectionalExecutiveCouncilisafive(5)memberselectedbody.Itistheadministrative bodyofthesection.Italsoactsasthemouthpieceofthesection. ThethirdlevelstructureistheDistrictAssemblyandtheDistrictExecutiveCouncil.TheDistrict Assembliesofthecooperativesaremadeupoftwo(2)representatives(amaleandafemale) electedbythesectionsofthedistricts. Thedistrictassembliesdeliberateonmattersofthecooperativeinthedistrictandtheyarethe finalmouthpieceofthedistrictcooperative. The District Executive Councils of the cooperatives are the final administrative units of the institutionsandactassuch.Itisaseven(7)memberbody.IthasaChairman,ViceChairman, secretary,Treasurerandthree(3)othermembers. Thecooperativeshavetheirapprovedconstitutionsthatguidetherunningofthecooperatives. Accountabilityandtransparencyareenshrinedintheconstitution. The cooperatives have legal status of existence. They are registered with their respective District Councils, Ministry of Agriculture Forestry and Food Security and the National DepartmentofCooperatives.

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V.

Financing

OurmainsponsorhasbeentheWorldBankandtheGovernmentofSierraLeonethroughthe RuralandPrivateSectorDevelopmentProject. TheprojectengagedtheConsultantwhodidtheinitialstudythatledtotheestablishmentof thecooperativesandhassupportedtheestablishmentofthecooperativesandtheiroperations throughouttodate. International Fund for Agricultural Development (IFAD) has also supported Tegloma Cocoa Farmers Cooperative of Kailahun District and Kasiyatama Cocoa Farmers Cooperative of Kono Districtwithloans. A total of (Le262, 453,000) two hundred and sixty two million, four hundred and fiftythree thousandLeoneseachwasdisbursedtosupportthetwocooperatives.MunafaCocoaFarmers CooperativeofKenemaDistrictisyettoreceivetheirfundingfromIFAD. Thefundsaretowardstherehabilitationanddevelopmentof400hectareseachofagedcocoa farmsinthetwodistrictsofKonoandKailahun. Promoting Agriculture, Governance and Environment (PAGE) a USAID sponsored project has alsosupportedthethreecooperativestothetuneof(10,000USDollars)fromtheirInnovative Grants Fund. The funds were used to support quality cocoa processing, capacity building, raisingofhybridcocoaseedlingsandgeneralfarmerscapacityprograms. VI. Interventions

Through the giants efforts of the RPSDP, the farmers have had a comprehensive developmentalpackagealongthecocoavaluechain.Amongtheinterventionsare: Thesupportfortheestablishmentofthreemodelcooperativesinthethreedistrictsofthe country The support towards farmers capacity building at all levels of the cocoa value chain including proposal writing, business plan writing, farm management practices, business managementskills,raisingandmanagementofgoodqualityhybridcocoaseedlingsnursery, groupdynamics The support to farmers business visit leading to the establishment of the Kayeigorma Company as the main trading and export wing of the cooperatives whose first annual generalmeetingweareholdingtoday The provision of expert technical knowledge to support the cooperatives in all their deliberations The support to obtain cocoa and coffee export license for the company to help peasant cocoafarmerstoexporttheirowncocoa.

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VII.

EthicsandPrinciples

Allthreecooperativesseektooperatebasedongoodethicalpracticesthatensuregenderand youth inclusion, transparency and accountability, environmental sensitivity and capacity enhancement. The cooperatives ensure that whatever they do are done in a transparent, accountable, consultativeanddemocraticmanner Thecooperativesensurethatwomenparticipatefullyintheirdeliberationsandthatwomen haveequalchanceswithmeninbeingelectedtopositionsoftrust. Theactivitiesofthecooperativesalsohelptheyouthtobefullyengaged.Thisprovidesa checkontheruralurbanyouthdrift. Thecooperativesworkagainstchildabuseandencouragefarmerstoeducatetheirchildren, especiallygirls. The cooperatives are also sensitive about environmental and sustainability issues. Compliance with environmental protection policies of the government and international protocolsisamongtheirguidingprinciplesandethics Thecooperativespromotecapacitybuildingeffortstoploughbackskilledhumanresources thatgenerateadditionalprofitsneededtocontinuecapitalizingthebusiness.

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Annex 1: Letter emailed from Noble Resources Commending Koyeigorma Company From: Graham Laird glaird@noblecocoa.com Subject: Kayeigorma cocoa To: Usif Sesay usif_1@yahoo.com, Kwabena Ohemeng-Tinyase ohemengtinyase@yahoo.com Date: Wednesday, February 23, 2011, 3:07 AM

Dear Kwabena/ Usif, So far this season, we have bought a total of 75mt from Kayeigorma. Whilst this tonnage remains quite modest, I thought I would let you know that, on the quantities so far delivered, the signs are promising that your good efforts in producing good quality with the co-operatives are bearing fruit. Indeed, of the cocoa so far delivered from your co-operatives, the quality and bean count show a vast improvement on the standards we have become used to receiving in Europe over the last few years: Sierra Leone cocoa has, sadly, won the dubious reputation of being one of the worst qualities in West Africa. However, thanks to your good efforts with the co-operatives, the Sierra Leone cocoa from Kayeigorma is rapidly regaining the ground lost over many years of neglect. The quality and bean size in the cocoa delivered to us has been excellent, and our manufacturer customers are increasingly interested in seeing it as a suitable replacement for Ivory Coast and Nigeria cocoa. Only Ghana remains of a higher standard perhaps with your continued good work, you will soon reach even those elevated levels! You are breaking the vicious cycle in which Sierra Leone cocoa was finding itself: because of poor quality, farmers were receiving low prices which, in turn, gave them no incentive to improve the standard of their produce. With Kayeigormas good efforts, your superior quality will bring better prices from the worlds buyers. I can only encourage your farmers to continue on this virtuous path which should bring them prosperity. Please extend my thanks and heartfelt congratulations to all of your farmers. I am aware that the past has been a troubled period for them all. However, cocoa used to be part of the lifeblood of Sierra Leone and I am thrilled to see that, because of their good efforts, their cocoa is moving back to centre-stage as a reference point for good, constant quality in Africa. Please urge them to keep up the good work! Kind regards,

Graham

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Annex 2: Quote from the Ministry of Trade and Industries Diagnostic Trade Integration Study Completed in 2006 with Supports from the World Bank, UNDP, WTO, etc. Cocoa holds particular promise for fairly rapid growth in the next ten years which could bring direct benefits to more than 140,000 households, many of them very poor. It is already the most important agricultural export, in spite of negligible support. The experience of Cote dIvoire and Ghana offers ample proof of the cocoa potential. International market conditions remain sufficiently robust to absorb whatever Sierra Leone might produce for the foreseeable future, providing reasonable quality standards are met. And cocoa expansion could help absorb some of the labor which will be released from artisanal mining over the next ten years. As the Governments capacity to drive agricultural export production is extremely limited for the moment, this studys first and most important message is: get the cocoa sector working again Annex 3: List of Award Winners Company Level Awards
Best Performing Cooperative: Munafa Cocoa Cooperative, Kenema Best Enterprising Cooperative: Tegloma Cocoa Cooperative, Kailahun Best Organised Cooperative: Most Efficient Cooperative: Best Performing Farmer: Best Performing Section: Most Active Female Farmer: Kasiyatama cocoa cooperative, Kono Kasiyatama Cocoa Cooperative, Kono Sheriff A. Soko - Munafa Cocoa Coops Kaklawa Section Munafa Cocoa Coops Madam Mary Kaikai- Kasiyatama Cocoa Coops

Cooperative Level Awards

KENEMA Best Performing Chiefdom: Best Farmer: Best Section:

Gorama Mende Chiefdom Sheriff A. Soko Kaklawa Section

KAILAHUN Best Performing Chiefdom: Best Farmer: Best Section:

Kuiva Buiima Chiefdom Moriba Morie Yawei Section

KONO Best Performing Chiefdom:

Nimikoro Chiefdom Komba Mondeh Mansayifeh Section

Best Farmer: Best Section:

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ANNEX 4: ANNUAL GENERAL MEETING PROGRAMME: KENEMA, JULY 29 2011 NO 1 ACTIVITY PART 1. OPENING CEREMONY Opening Prayer INTRODUCTION OF CHAIRMAN Chairman Remarks Introduction of Dignitaries Welcome Address SPEECHES: a. Project CoordinatorRural and Private Sector Development Project (RPSDP) 8.40 8.45am 8.45 8.55am 8.55 9.10am 9.10 9.25am 9.25 9.35am TIME 8.30 - 8.35am 8.35 8.40am 2 3 4 5 6 RESPONSIBLE PERSONS All Madam Mary Kaikai Kasiyatama Cocoa Coops Kono Chairman Sahr Musa Mattia Mayor, Kenema City Council Peter M Kaindaneh Patrick Caulker

b.

Director

Sierra Leone Investment and Export Promotion Agency

9.35 9.45am

Charles Annor-Frempong

c. d. 7

Task Team Leader Rural and Private Sector Development Project (RPSDP) 9.45 10.00am 10.00 -10.30.am Minister of Trade

Keynote Address TEA BREAK

PART 11: BUSINESS OF THE DAY Reading of reports: a. Cooperatives Report b. Kayeigorma Company Report c. Auditors Report LUNCH John Foday 10.30 -12.30pm 12.30 1.30pm Chairman, Kenema District Council 1.30 2.30pm Chairman, Kailahun District Council Chairman, Kono District Council Deputy Minister of Trade and Industry Sylvester Abdulai Emile Kargbo & Associate

PART 111: - AWARD OF PRIZES a. b. c. d. Bonus prize to Munafa Cocoa Cooperative Kenema Bonus prize to Tegloma Cocoa Cooperative Kailahun Bonus prize to Kasiyatama Cocoa Cooperative Kono Individual prizes

10 11

Chairmans closing remarks Vote of Thanks

2.30 2.45pm 2.45 2.50pm Madam Mamie Caulker Tegloma Cocoa Cooperative Kailahun All All

12 13

Closing Prayer Refreshments

2.50 3.00pm 3.00pm

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Date: July 18 2011

Media Advisory
FREETOWN JULY 18 2011:- The attention of the press is hereby drawn to an important groundbreaking event which will convene from 9:00am - 3:30pm on July 29 2011 in the main hall of the Government Secondary School in Kenema. BACKGROUND: - The Government of Sierra Leone through the Ministry of Agriculture, Forestry and Food Security and the Ministry of Trade and Industries have been promoting activities that add value to the production and sale of agricultural commodities in the country. As a result of this support, the Kayeigorma Company was established in July 2010 by three cooperatives formed in Kenema, Kono and Kailahun Districts through the support of the Rural and Private Sector Development Project (RPSDP) financed by the World Bank and administered by the Government of Sierra Leone through the above named ministries. Since its establishment, the company is now having its first Annual General Meeting (AGM) on the theme Empowering Small Holder Cocoa Farmers for World Market Trade on the above stated date, time and venue. The occasion will be chaired by Dr. Joseph Sam Sesay, Minister of Agriculture, Forestry and Food Security; and the Keynote Address will be delivered by Dr. Richard Konteh, Minister of Trade and Industries. Interested press houses wishing to cover the occasion are invited. For further information please call Usif Rahman Sesay on +232 (33/76) 352558.

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