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Molinos de Honduras

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Honduras Overview

•9,26MPopulation

•18 (of which 15 are coffee producing)States

•120.000 sq. KmArea

•12,98%Arable Land

•2,203.95 USD (2018)GDP per Capita(PPP)

•Coffee, bananas, citrus, corn, African palm, shrimp

Key AgriculturalProducts

•4.3M (28% coffee)Labor Force

•66%Population Below Poverty Line

•24.6218Exchange Rate (USD)

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Honduras Coffee OutlookFacts & Figures

Area planted with coffee 400,000 ha (365,000 in production)

Yield per hectare 15,5 60kg bags per hectare

Harvest / Shipment period Nov to May / Dec / July

Farm average size Between 2 and 3 hectares. > 98% small producers

Coffee growers Around 135,000

Internal market distribution

70% sold to intermediaries, 15% to exporters, and 15% to Coops, and

producers Associations.

A Record Crop

Leaf rust outbreak: recovery is nearly 100% complete, new plantations, and renovations overcompensate production. Outlook for the future: Total area planted with coffee continues to increase year after year, new plantations are mostly Catimors, with some specific regions maintaining traditional varietals.Consideration: Although Honduran farmers have been increasing the size of its coffee crop area and are using better technology than the past, the dry spell, and the Coffee prices could influence productivity, quality and yield.

- 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 8,000,000

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Honduras Crop Volume Evolution

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Volcafe in Honduras

• Established in September 6,1960

• The oldest active coffeeexporter in Honduras

• Located in:• San Pedro Sula• Santa Rosa de Copan• Comayagua• San Nicolás• El Paraíso• Yoro• Peña Blanca

• 7th Largest Exporter inHonduras

• 120 employees in season

Molinos de Honduras

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MDH Change in Purchase Strategy

SUPPLIER BASE % 2015 2016 2017 2018 2019 2020PRODUCER 17% 40% 52% 54% 54% 60%COOPS 13% 17% 31% 31% 36% 34%"INTERMEDIARIO" 70% 43% 17% 15% 10% 6%

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2015 2016 2017 2018 2019 2020

PRODUCER COOPS "INTERMEDIARIO"

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Guama Danta – Angel Ramos Angel Ramos began planting coffee 20 years ago using a hectare of land which he bought from his mother. His parents and grandparents taught him how to plant and work in the coffee field. He began selling coffee to Molinos during crop 14-15 and has since seen an increase in his profits. He now owns 6 hectares of land and is planning to purchase 2 more for crop 19-20 to keep growing.

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Pacavita –Silvestre Vasquez

The departments of Lempira, Marcala, and Intibuca are in a special area of the western region of Honduras. They are in a stripe where there is no rain right after December. This brings a big advantage for the producers in the area because they can sun dry their coffees. Due to this fact the western region of Honduras has always been dedicated to coffee farming. The first coffee farm in Honduras was founded in Marcalaby a group of Germans, and the biggest coffee influence in Honduras come directly from Germany. Most producers in this zone have the tradition of wet milling the coffee and drying it on their patios. This process has helped Pacavita gain its unique characteristics.

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IWCA (International Women’s Coffee Alliance) Worldwide group of women that promote the development of women coffee producers. There are 20 chapters in the world working to strengthen alliances that improve the living conditions of women and their families.

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Cooperative Certified Coffee Sourcing

• Certifications from Coops:• FT• FTO• RFA• UTZ • CAFÉ PRACTICES• ORGANIC• ORGANIC COMBINATIONS• IWCA Women Coffee

CorquínOcotepeque

Intibucá

Marcala

• Began working with 3 Coops in 2010 and have grown to sorting coffee from 20+ Coops in four different regions.• Intention to help startup Coops / created long term relationships.• Pay minimum price for FT and FTO coffees.• Quality control in our SRC and Comayagua. • Calibration and cupping classes with Coops.

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Quality Equipment & Crew

• JIT Inventory Management

• New Equipment• Quality Protocols &

Procedures• Specialized

Personnel (Q Graders)

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Technical Assistance: Volcafe Way

Model Farm Las Moras, Siguatepeque, Comayagua

Model Farm Mata de Plátano, Moroceli, El Paraíso

17 “Model Farms” in the country

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COVID-19 in Honduras

Full Lockdown in the Country494 confirmed Cases as of 04/21/202046 Deaths

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Questions?

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