Global hazelnut consumption is projected to grow at a CAGR of 10.1% during the forecast period (2020-2025).
Production Growth
Turkey dominates hazelnut production, with an estimated share of 65+%, globally. In terms of consumption, Europe is expected to register the highest CAGR of 7.6% during the current period, due to the increasing demand for hazelnuts from the chocolate industries of Europe.
Impactinvestment/ Health Related Opportunity
- With increasing demand from consumers and recognised health benefits, the market is expected to grow over the forecast period. Hazelnut is a rich dietary source of protein, unsaturated fatty acids, and linoleic acid. It contains a higher concentration of alphatocopherol (vitamin E) than any other nut. Research studies show that consuming hazelnuts can lower LDL (bad) cholesterol and increase HDL (good) cholesterol, which is increasing the sales of hazelnut.
- Hazelnuts are used in desserts, such as cakes, muffins, chocolate dishes, praline, or pastries. With the growing demand for the product various producers are entering into the market with innovatove products. Bühler, the world’s largest provider of nut processing technology, had announced that it expanded into the natural hazelnut market in May 2018, with the Turkish launch of its innovative combination of sorting technologies, leading to natural hazelnut processing systems.
Pro-EU politics
The center-right Party of Action and Solidarity (PAS) won a robust majority in July 2021, giving momentum to a push for EU membership. The center-right PAS, led by Moldovan President Maia Sandu, ran on a platform of European integration, economic development and anti-corruption.
Moldova hazelnut potential
Few places in the world have the necessary climatic conditions that are required to produce Hazenuts. Turkey and Italy together produce approximately 50% of global production. Moldova has the distinct climatic conditions necessary, and several key advantages in terms of relatively low costs of land and labour.
The business is seeking expansion capital in the form of Euro 3m debt and Euro 1m equity.
Hazelfarm: Background & Introduction
- Discussions and research into Hazelnuts began at the end of 2016. Operations started in
2018 with the establishment of a modern nursery and the business now consists of four
principal activities:
- Nursery with a capacity of up to 320k seedlings per annum.
- Orchard consisting of 45 ha (2018).
- Technical support and consultancy – that accompanies sales of seedlings to farmers.
- Export oriented trading operations, purchasing hazelnuts from those farmers that bought seedlings and selling into the European Union.
Strategy
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With increasing demand and a shift away from production in Turkey, the strategy is to form
a hub of expertise/ production/ marketing utilizing a tried and tested integrated
“outgrower” model, latest varieties and key market access to focus on:
- Nursery operation to be able to provide high quality seedlings to the market.
- Own production – currently 45 ha with the strategy to expand by 200 hectares.
- Provide technical support and consultancy to local growers.
- To “buy back” hazelnuts from local farmers and export to meet growing demand inside the European Union.
Growth
- The business is now seeking the addition of debt and equity in order to fund the expansion of the business. Euro 1m in equity is being sought for a minority share of the business and Euro 3m of structured debt, to be split over two phases.
FinancialHighlights
- IRR 14.7% (x6.6 EBITDA Terminal Value)
- NPV Euro 11.3m (8.12% discount)
- EBITDA positive year four onwards.