Serendipalm: Charting a New Path in an Industry Known for Environmental Degradation in Ghana
One hundred miles northwest of Accra, Ghana, sits Asuom, a village of surprising and beautiful contrasts. It’s here that Root Capital client Serendipalm is charting a new course for one of the world’s most environmentally damaging agricultural industries.
Palm oil plantations, primarily in Southeast Asia, have devastated critical habitats for jungle-dwelling species like tigers and orangutans. On the island of Borneo alone, industrial palm oil production has destroyed an average of 350,000 hectares of forest—an area the size of Rhode Island—every year since 2005.
But Serendipalm is the antithesis of the industry norm. It was established in 2006—without clear-cutting or deforestation—by personal care products pioneer Dr. Bronner’s. The goal was to demonstrate that palm oil could be cultivated in a just and sustainable way.
Preserving Forests, Growing Incomes
Before Serendipalm took roots in Asuom, there were largely two types of oil palm farmers in the region: those who relied on pesticides to increase their production—and, as a result, regularly suffered from chemical-related illness—and those who couldn’t afford chemicals and remained stuck in a vicious cycle of low yields and low prices.
Now, Serendipalm members receive regular trainings that help them maximize their harvests and their incomes—without harming the earth. Extension workers conduct home visits to teach farmers how to apply the organic fertilizer that the business provides free of charge. They also train producers on techniques that boost their yields, such as intercropping, pruning, weeding, and harvesting at proper times.
“That’s what makes us different from other companies,” says Safianu Moro, Serendipalm’s general manager. “We work with farmers on a day-to-day basis.”
Diligently promoting the proper use of natural inputs allows Serendipalm to maintain their 100% organic certification—which ensures farmers receive a premium 10 percent above the local market price for palm oil.
Investing in Women
Just twenty years ago, the palm farmers of Asuom had to make do without basic infrastructure. Road networks were poor, quality of education low, and healthcare minimal. Many people didn’t even have regular access to potable water. This lack of infrastructure disproportionally affected women—especially mothers.
“Women in labor had to be transported over very bad road networks [to a facility] 30 kilometers away,” reports Safianu. “Some people actually lost their lives.”
Serendipalm’s leaders were determined to stop this injustice. Using the premium they received from their Fair Trade certification, they helped fund a new health center in Asuom, including a maternity ward so that mothers could deliver babies safely. And they didn't stop there: The vast majority of Serendipalm’s processing employees are women, and the business is committed to paying them higher-than-average wages.
Supporting Business Growth
In 2014, Root Capital offered the business its first-ever loan from an external financier. Since then, we’ve loaned the business over $1 million, helping the company make timely payments to its farmers and grow its operations. We have also provided capacity building workshops to strengthen staff members’ knowledge and skills related to working capital management, internal controls, and leadership.
“We can confidently say that Serendipalm has grown as a company since we started receiving financial support from Root Capital,” says Safianu. “You just look at the investments we’ve made since before meeting Root Capital and after Root Capital, and it speaks for itself.”
Finance and training from Root Capital have helped the business pay farmers higher prices and employees better wages. They’ve empowered Serendipalm to make critical business investments. And they’ve supported the business in its pursuit of sustainability. Together, Root Capital and Serendipalm are building a model for reducing palm oil production’s pressure on fragile ecosystems around the world.