NEW YORK - TechnoServe President and CEO Peter A. Reiling will announce today that McKinsey & Company has agreed to undertake a comprehensive and independent analysis of the global coffee industry for TechnoServe, on a pro bono basis over the next 10 weeks. The announcement will be made during TechnoServe's 35th Annual Meeting, held at Credit Suisse First Boston's One Madison Ave. headquarters in New York City, during a 2:30 p.m. special session on the global coffee crisis and its impact on farmers in Latin America and Africa.

Market prices of coffee have dropped so dramatically in recent years that many producers in developing countries are no longer able to cover their costs. The crisis is severely impacting millions of small-scale and large growers, the workers they employ and their families and communities that rely on the industry as a major source of revenue and jobs.

"The global coffee crisis has created a human tragedy of widespread unemployment, bankruptcy, hunger and despair," said Reiling. "For 35 years, TechnoServe has devised and implemented business solutions to reduce rural poverty in developing countries. Now we've asked the global consulting firm, McKinsey & Company, to conduct an objective, fact-based analysis of the coffee crisis and present options for how coffee producers around the world can weather the storm. McKinsey's experience and skill in analyzing highly complex issues is ideally suited for this task."

McKinsey & Company is working with TechnoServe to create an Advisory Committee that will provide information to the McKinsey team, assist with data gathering and review findings. Advisory Committee members are being recruited from various countries, regions and entities in the coffee value chain to achieve the broadest representation possible. Independent anti-trust counsel will participate in all Advisory Committee meetings.

Separately, TechnoServe is inviting all coffee industry stakeholders including representatives -- of producing-country governments, associations, producers, millers, exporters, importers, roasters, distributors, suppliers, financiers and non-profit organizations -- to support the McKinsey & Company analysis by providing relevant information and agreeing to be interviewed by the McKinsey team. All stakeholders who contribute to the analysis will be recognized in the final document. TechnoServe will present findings and recommendations during a public forum and at a date and time to be determined.

Coffee industry stakeholders who are interested in supporting the analysis with information and interviews should contact Julie Peters, TechnoServe/Nicaragua, jpeters@ibw.com.ni.

For media inquiries and general information, please contact Laura Johnson, TechnoServe/U.S., ljohnson@tns.org, 203-899-3151 or 203-852-0377.

In another major development, on May 5 the Multilateral Investment Fund (MIF), an independent fund administered by the Inter-American Development Bank, announced the approval of a $3 million grant "to improve coffee quality and develop new market mechanisms that reward quality through higher prices to producers," matched by $1.6 million in funding from TechnoServe. This regional project will support coffee producers in five Central American countries -- Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua and will be implemented by TechnoNicaragua, a nonprofit institution created in Nicaragua by TechnoServe and dedicated to finding business solutions to address rural poverty. (See: http://www.iadb.org/NEWS/Display/).

Additional TechnoServe Coffee-Related Initiatives: In Nicaragua, TechnoServe is an organizer of the current Cup of Excellence® competition, the second annual countrywide quality competition. Out of 385 samples submitted, an international jury recently selected 37 winning coffees -- 19 of which were produced by smallholders -- which will be offered for sale to international buyers during a special June 10, 2003 Internet auction (see: www.nicaraguancoffees.com and www.cupofexcellence.org).

In Nicaragua, TechnoServe is also working directly with small-and medium-scale coffee growers to help them improve quality and connect to higher-paying markets (see:http://www.tns.org/latin/nica-coffee.html). In El Salvador, TechnoServe is a co-sponsor of the current Cup of Excellence® competition, the first annual countrywide quality competition. Out of 336 samples submitted, an international jury recently selected 31 top-quality coffees; these will be offered for sale to international buyers during a special July 1, 2003 Internet auction (see: www.salvadorancoffees.com and www.cupofexcellence.org).

In Tanzania, TechnoServe volunteer consultant Sarah Fox (a former McKinsey & Company analyst) conducted a ground-breaking analysis of that country's coffee taxation policies, to determine their effects on the overall industry and on the country's tens of thousands of small-scale growers. The study, presented in January 2003 to 50 key players in Tanzania's coffee industry, revealed that Tanzania has the highest taxes on coffee when compared to five "peer" coffee-producing nations (Costa Rica, Ethiopia, Guatemala, Kenya and Uganda). It also showed that countries like Costa Rica and Uganda have significantly reduced taxation levels in recent years both to alleviate the effect of major price drops on coffee growers and to make their industries more competitive. TechnoServe presented its findings to the Honorable Basil Mramba, Minister of Finance. (Minister Mramba is the keynote speaker today at TechnoServe's 35th Annual Meeting.)

In Tanzania, TechnoServe is also working directly with small-and medium-scale coffee growers to help them improve quality and connect to higher-paying markets (see: http://www.tns.org/africa/tanzan-coffee.html).

TechnoServe's coffee initiatives are funded by the U.S. Agency for International Development, Procter & Gamble, and a private philanthropist.

TechnoServe, Inc.

TechnoServe, Inc.

TechnoServe is leading a movement that empowers people in the developing world to build businesses that break the cycle of poverty. Growing enterprises generate jobs and other income opportunities for poor people, enabling them to improve their lives and secure a better future for their families. Since its founding in 1968, the U.S.-based nonprofit has helped to create or expand thousands of businesses, benefiting millions of people in more than 30 countries. The Financial Times has rated TechnoServe one of the top five NGOs for corporate partnerships. Charity Navigator has also awarded its highest Four Star ranking to TechnoServe.

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