NORWALK, Conn., May 18, 2012 /PRNewswire/ -- Diageo, the
world's leading premium drinks company, announced today that it has
signed letters of intent to foster partnerships and projects that
will aid in the agricultural development of Ethiopia and Tanzania. Diageo will work to develop and
implement a scalable barley farming project in Sebeta, Ethiopia and a scalable sorghum value chain
project in Mogoro, Tanzania. The projects when fully realized
will represent an overall investment of $1.5M in Ethiopia and $2M
in Tanzania and will begin
to be implemented in 2012. They build on Diageo's commitment
to support the development of agricultural economies in
Africa, a business imperative in
line with the Company's growth ambitions across the continent.
This new investment was announced at the Symposium on Global
Agriculture and Food Security hosted by The Chicago Council on
Global Affairs, in collaboration with the World Economic Forum. On
the eve of this weekend's G8 Summit, this high-level symposium
brings together President Barack
Obama, with G8 and African leaders, businesses,
international organizations and civil society to discuss new
activities to advance global agricultural development, and food and
nutrition security in Africa.
Paul Walsh, CEO Diageo and
signatory of a pledge in support of the G8's food security agenda
commented, "The complex global challenges we face – from climate
change to resource scarcity – will require even greater cooperation
and collaboration of the public sector, private sector and civil
society. At Diageo we know that to achieve our business aims we
have to engage our stakeholders across the whole value chain to
create strong socio-economic development programs. It is my
firm belief that the most genuinely strategic and forward looking
businesses treat sustainability as a core component of business
delivery."
Diageo is committed to local, sustainable sourcing of
agricultural raw materials. In Africa, Diageo currently sources about 50% of
its raw materials locally, and aims to increase the sourcing of
local raw materials to 70%, which is an increase of more than 30%
from a 2007 baseline. The new projects in Ethiopia and Tanzania will provide Diageo with a long-term,
secure and sustainable source of raw materials, which reduces
exposure to increasingly unpredictable changes in availability of
material, and potentially volatile global commodity markets.
In Ethiopia, Diageo will build
a public-private partnership through which the Company will work
with the Ethiopian Agricultural Transformation Agency (ATA) to
design and implement a barley contract farming project
strategy. In support of the G8 Member's pledge and in
line with Diageo's own commitment to development in Africa over the next 12 months, Diageo will
design and test a pilot barley contract farming project with the
aim to source 1000 metric tons (MT) barley from a substantial
number of local smallholders in the first year. In the years that
follow, the project could increase in scale, extending its work
with both local smallholders and larger farmers, with a potential
capacity to source up to 20,000 MT of barley within Ethiopia for local use and/or export.
In Tanzania, Diageo will
collaborate with the Government of Tanzania to develop and implement a scalable
sorghum value chain project in Morogoro that will scale-up sorghum
cultivation and sourcing in Tanzania up to a potential 20,000 MT/year by
2016, for local use and/or export. They will also work to
build genuine appetite and capacity (e.g. training, financial and
physical infrastructure) to build a sustainable sorghum value chain
which consists of local smallholder 'satellite' farming communities
commercially connected with larger 'nucleus' farms, and will
promote the development and sharing of sustainable sorghum
cultivation and post-harvest practices.
Nick Blazquez, President, Diageo
Africa, commented: "Diageo is proud to take part in this leadership
initiative between African governments, the private sector and
development organizations to accelerate the growth of agriculture
in Africa. As a business that has
operated across the continent for many decades, we see firsthand
the importance of this agenda to local economic growth and the
social empowerment of farming communities, and are fully committed
to Grow Africa and supportive of the New Alliance for Food
Security and Nutrition. In the spirit of partnership, we are
excited to work closely with the Governments of Ethiopia and Tanzania to create innovative solutions that
are commercially and environmentally sustainable, scalable and
socially inclusive."
These new initiatives build on Diageo's current projects that
are in place to assist African communities. These include
supporting local enterprise development, investing in and
stimulating a competitive beverage industry, building local skills
and capabilities, and researching options to increase
inter-regional trade and product exports. Additionally, as part of
its commitment to the UN Millennium Development Goals, Diageo
launched the Water of Life program in 2000 with an aim to provide
access to clean drinking water and sanitation to a million people
every year. To date, Diageo has funded over 170 different water and
sanitation projects, impacting nearly 5 million people in 16
different countries across the continent.
Blazquez continued: "As our largest emerging market region,
Diageo has invested over $1.5 billion
in capex and acquisitions in Africa over the last 5 years. Supporting local
agricultural development is not only a good thing for local
economies, but is a crucial component of Diageo's growth strategy
in Africa. We look forward to
growing our relationships to make a bigger contribution in the
future."
About Diageo
Diageo (Dee-AH-Gee-O) is the world's leading premium drinks
business with an outstanding collection of beverage alcohol brands
across spirits, beer and wine. These brands include Johnnie Walker, Crown Royal, J&B,
Windsor, Buchanan's and Bushmills
whiskies, Smirnoff, Ciroc and Ketel One vodkas, Baileys, Captain
Morgan, Jose Cuervo, Tanqueray and
Guinness.
Diageo is a global company, with its products sold in more than
180 countries around the world. The company is listed on both the
New York Stock Exchange (DEO) and the London Stock Exchange (DGE).
For more information about Diageo, its people, brands, and
performance, visit us at Diageo.com. For our global resource that
promotes responsible drinking through the sharing of best practice
tools, information and initiatives, visit DRINKiQ.com.
Celebrating life, every day, everywhere.
SOURCE Diageo