AAF SME Fund Impact: Avison

Business Challenge

Avison is a South African fertiliser producer with production capacity of 36,000 tonnes. It manufactures pelletised chicken manure fertiliser as well as integrated fertiliser (a.k.a. IPNM which is a combination of chicken manure and chemical fertiliser). It is the largest producer of integrated fertiliser in South Africa and distributes across multiple regions in the country.

The precursor company, FMO, was a division of a multi-billion rand agronomic services conglomerate. The parent company was restructuring and not focusing on Avison as it was considered a non-core business. The company therefore lacked working capital to develop its business.

Our Approach

The AAF SME Fund has committed $4.2m to Avison since April 2014. The Fund’s approach was to create a much larger company with critical mass across the country. The Fund therefore

engineered an MBO of FMO;
simultaneously led the acquisition of a similar company, Avison, in the Western Cape;
developed Avison Zambia in order to increase the company’s footprint in Southern Africa.

Our Impact

Improved Livelihoods

Increased number of jobs by more than threefold from 31 to 103 employees, 87% of whom are permanent as compared to 45% previously
Saving farmers money through the use of Geo Agro agronomical software which results in precise and cost-reducing farming decisions. Farming costs in Africa can easily average more than $100,000 per hectare

Enhanced Food Security

Trials carried out in South Africa show that Avison fertiliser increases yields by close to 40% as compared to chemical fertilisers
Expanded product offering, from distribution of fertiliser to farmers, to include agronomic services and web based tools / platforms such as Geo-Agro that will improve farm output
Facilitated negotiations for strategic partnership with AFGRI, the largest farmer co-operative in Africa to increase farm yields

Improved Business Operations

Fund assistance with strategic repositioning resulting in guaranteed volume growth from 4,000 tonnes per year to more than 18,000 tonnes per year and increasing factory capacity to 36,000 tonnes. Pre-investment, no offtake agreements existed, factory capacity was 24,000 tonnes and sales was less than 5,000 tonnes
Expanded operations to Zambia for greater access to other markets in Southern Africa
Acquired a leading biological farming inputs manufacturer in South Africa thereby significantly improving Avison’s farming innovation platform

ESG Impact

Farming innovation with significant carbon footprint reduction especially through the use of Geo Agro software
Precision farming focusing on plant health through soil preservation and improvement
Reduction in the use of chemical fertiliser
Food production improvement added close to 19,000 tonnes to the food value chain