Supporting small businesses
In 1997, Retired Major Silas M'thurua and Johannes Petrus Viljoen collaborated together to start Lobelia Farms Ltd, a rose-growing farm in the region of Mount Kenya.
With support from our operations in Kenya, we part-funded investments in a wide range of farming infrastructure including green houses, a water dam, cooling equipment, and computerized fertilizer-mixing compartments.
In the 15 years since, Major Silas M’thurua and Johannes Viljoen have grown the farm from an initial one hectare to the current 20 hectares. It now has an approximate turnover of US$4.4 million and employs (and houses) 100 members of staff.
The hedging solution
During 2011, the Kenyan shilling experienced rapid depreciation losing up to 39% of its value against the Euro at one point, before appreciating strongly towards the end of the year. This could have resulted in a major loss to LFL as the company’s receivables were in Euros and its expenses were in the local currency.
Using our local knowledge and global expertise we provided a foreign exchange forward contract line which LFL used to hedge about 600,000 Euros. The hedging saved the company over 25,000 Euros and helped them to weather the storm.