admin, Author at Zebu Investments

ZEBU & NORFUND COMPLETE INVESTMENT IN ONE OF MOZAMBIQUE’S LEADING DISTRIBUTORS OF FOOD & RELATED CONSUMER GOODS

24 March 2022

As part of its continued endeavour to enable food security across Africa, the Africa Food Security LP (AFS LP), managed by Zebu Investment Partners, together with Norweign Investment Fund for developing countries (Norfund), have successfully closed a buyout of the Terramar Group.

Terramar is a leading importer, retailer, wholesaler and distributor of frozen, chilled and ambient consumer goods in Mozambique’s food & beverage market. The company’s proficiency in sourcing and distribution, through its two international procurement centres and best-in-class cold storage infrastructure, enables Terramar to service C.60% of this market and deliver food security to both rural and urban customers.

Operations started in 1998 with the setup of Portugal Fisheries in South Africa, initially as an importer of fish and shellfish from Mozambique. Subsequently, the company started the exportation of meat from South Africa to Mozambique, and thus established Moçambique Terramar, Trading in Maputo in 2000. Terramar in Mozambique is now the heart of the Group, importing products from is Portuguese and South African procurement centres, as well as from a variety of local suppliers, which include multinationals, such as Coca Cola and Unilever.

The AFS LP aligns with supporting a differentiated procurement and distribution model, that has the ability to service base of the pyramid consumers, facilitating movement of specialist food products to underserved rural populations, thus enabling food security in Sub Saharan Africa. The fund is pleased to support a company that is bridging the gap left by shortfalls in local production, in order to meet Mozambique’s food demands.

Dennis Matangira, Senior Managing Partner of ZIP, was particularly impressed with Terramar’s infrastructure that has allowed them to specialise and become one of Mozambique’s top import and distributors. “Terramar’s vertically integrated supply chain, as well as their multiple international procurement centres, enables the selection of a diverse range of products globally, at the best prices, and their world class cold storage infrastructure allows them to effectively reach rural communities who might not otherwise be serviced. This model could be leveraged to supply products to other Sub-Saharan Africa countries and help bring food security to millions more.”
Simbah Mutasa, regional director for Southern Africa in Norfund said “Norfund aims to invest in companies that give farmers, processors, and manufacturers access to markets for their products. We believe that Terramar can be an important catalyst for the development of the value chains needed, making further investments in the sector viable.”

Terramar Group CEO added “Our strength and capability in supply chain and sourcing has been a pillar of growth for Terramar and will continue to be at the core of future plans to continue our growth trajectory. Customer service, and building mutually beneficial and sustainable relationship across our customer base, remains a focal point for us as a business. Ensuring continuity of availability for all the consumer loved brands and products that we have in our portfolio is critical for Terramar. This buyout and investment by AFS LP and Norfund provides a renewed springboard for our future focus to maintain service, relationships and supply.”

The transaction marks the 7th deal in AFS LP portfolio and presents the opportunity for various producers and suppliers along the agriculture value chain in Mozambique to have access to sell their outputs. The AFS LP’s Technical Assistance Facility (TAF), will explore funding inclusive projects targeting expansion of bottom-of-the-pyramid initiatives, upstream smallholder farmer support schemes to develop local supply bases and increase the company’s local purchasing capacity, and develop CRM systems to support supply chain management related to expansion of market channels.

For further information, please contact:
Brian Frimpong,
Managing Partner,
Email: bfrimpong@zebuinvestments.com

Jordan Minkin,
Investor Relations Analyst
Email: jminkin@zebuinvestments.com

About Zebu Investment Partners
Zebu Investment Partners (ZIP) is a private equity fund manager established to invest in food production and processing throughout the African continent. Managing funds totalling $121m, we focus on creating transformational opportunities for companies along the food value chain to improve and enhance African food production, while bringing investors long-term, above-market returns. Our funds’ focus is on growth equity investments within Africa, including a strong ESG focus. Further information is available at http://www.zebuinvestments.com/.

ZEBU INVESTMENT PARTNERS (ZIP) ARE PLEASED TO ANNOUNCE ITS EQUITY BUYOUT OF AMC TRADE FINANCE (AMCTF)

Zebu Investment Partners GP Limited (ZIP) has followed on from its 2020 investment in AMC Trade Finance Limited (AMCTF), through its African Food Security LP (AFS LP), resulting in an equity buyout of the founders, Africa Merchant Capital Limited (“AMC”). AMCTF is a specialist trade finance business that was founded by AMC in 2016 and provides secured and structured trade finance solutions for Africa-focused trade.

Cobus Visagie, Group CEO of Africa Merchant Capital said: “AMCTF has a strong team that we are confident can achieve great success and we look forward to following their continued progress. The sale of the AMCTF subsidiary, allows me and my team at AMC to refocus and reposition its merchant bank offering in the midst of a rapidly changing business environment. With the strong foundations laid over the past 9 years, AMC has proven its resilience and adaptability in its offering to provide corporate finance advisory, as well as other finance and growth capital solutions, for successful mid-market businesses active in Sub-Saharan Africa. We are excited about this market opportunity that AMC continues to serve.

Brian Frimpong, Managing Partner of ZIP said: “We are excited about the opportunity to deepen our support to Africa trade finance, by re-energizing a new management team with deep industry experience to be focused on improving access to finance for SME exports & imports, mainly in the agro value chain. The new management team, led by a seasoned-female, Anne-Marie Woolley, will drive our gender-lens agenda and expand our inclusive strategy to improve market access for growers, aggregators, and distributors.”

Anne-Marie Woolley is taking up the role as CEO of AMCTF. Anne-Marie is a doyen of structured trade finance who has been active on the African continent for almost 30 years. She has previously held a number of leadership roles with International and South African banking institutions and has been an active member of AMCTF’s credit committee for the whole of 2021. She brings with her a wealth of experience and a passion for the trade finance business. Anne-Marie has in her career worked with several team members of AMCTF.
Focusing on impact investments in SMEs in the food security industry, ZIP believes it can make a significant difference in Africa by promoting and financing trade into Africa, out of Africa and in between African economies.

For further information, please contact:
Jordan Minkin,
Investor Relations Analyst
Email: jminkin@zebuinvestments.com

About Zebu Investment Partners
Zebu Investment Partners (ZIP) are a private equity fund manager established to invest in food production and processing throughout the African continent. Managing funds totalling $121m, we focus on creating transformational opportunities for companies along the food value chain to improve and enhance African food production, while bringing investors long-term, above-market returns. Our funds’ focus is on growth equity investments within Africa, including a strong ESG focus.
Further information is available at http://www.zebuinvestments.com/.

About AMC Trade Finance
AMC Trade Finance (AMCTF) provides bespoke, secured and structured trade finance solutions for African focused trade.
Our model is transaction driven, rather than balance sheet focused, and our aim is to dramatically increase the availability of trade finance for inward and outward trade to selected African countries, with a particular focus on Sub-Saharan Africa.
Our methodology requires no changes to standard trade finance bank processes and procedures. We take great care of applying mechanisms to the benefit of both buyers and sellers when structuring our trade finance solution into the client’s existing operations.
Further information is available at (https://www.africamerchantcapital.co.uk/trade-finance/).

AFS LP BUYOUT OF LEADING SOUTH AFRICAN FREE-RANGE POULTRY OPERATION SIGNALS MONUMENTAL JUNCTURE FOR CONSCIOUS CONSUMERISM MARKET IN AFRICA

As part of its continued endeavour to enable food security across Africa, the Africa Food Security LP (AFS LP) has successfully closed its investment in Elgin Free Range Chickens Holdings (EFRCH).

EFRCH is a leading South African vertically integrated free-range poultry operation, capturing the ever-increasing conscious consumerism market of sustainably sourced products from farm to fork. The independent farming and food processing operation takes pride in meeting rigorous quality and ethical standards and currently supplies free range chickens to leading South African retailers, food service companies, restaurants, and its own retail outlets.

The AFS LP, which is the sophomore fund of Zebu Investment Partners GP Limited (ZIP), focuses on food production and processing throughout Africa. The fund is underpinned by the assertion of the positive impact which investing across the agricultural value chain can have for food security, through improved reliability of the supply chain for processors.

As a way of providing ethically raised chicken, free of antibiotics and growth promoters, founder Jeanne Groenewald initially started supplying chickens to her family and friends in 1996. Since then, she has meticulously grown and developed the business into a leading supplier of the top retailers in South Africa and has also successfully launched the Company’s own retail outlets in the Western Cape. At c.60%, poultry is the most consumed animal protein in South Africa, and with the CAGR for free-range chicken expected to continue in the double digits, there is still abundant scope and opportunity for the Company to drive further penetration. This presents a compelling market opportunity for AFS LP in a lucrative and emerging segment of the poultry industry of South Africa.
ZIP Senior Managing Partner, Dennis Matangira, commented on South African consumer consumption patterns, “The pandemic came at a time when the global food system was already under strain. In Africa, this exposed numerous vulnerabilities within our food value chain, and influenced more consumers to seek healthier and more sustainable food sources. Poultry is the leading animal protein consumed in South Africa, and we want to play an active role in developing the free-range segment of this market, and by doing so, increasing access to all.”

The equity buyout represents a new dawn for EFRCH and the opportunity to increase production capacity, geographical footprint, and continued high ethical and animal welfare standards.

Founder Jeanne Groenewald has been instrumental in expanding the business and entrenching it as a trusted brand with ethical and humane operating practices in line with international best practice. Commenting on the reason the Company has decided to partner with Zebu and her decision to exit, Jeanne mentioned “I often refer to the company as my first born. It has been 25 years in the making and the time has come to release this child to fly to bigger heights. As with any protective mother I was very selective, in choosing the right investor to ensure the company culture, morals and ethics are upheld and continue into the future. Zebu ticked all these boxes. They have ESG at the forefront of their investment criteria, are passionate about animal welfare, sustainability, and people upliftment. I wish them well in taking this company to its next level.”

ZIP’s Senior Managing Partner further highlighted the impact that the diversity and strength of the EFRCH team has had on performance to date, “Not only is EFRCH female founded, but also female led, through its senior management structures. This is a key consideration as part of our gender-lens investing priorities, and we also believe is a reason the company has been able to achieve the successes it has to date. We are looking forward to continuing to embed diversity, ethics and positive impact across the value chain, and in the community within which EFRCH operates”.

The AFS LP’s Technical Assistance Facility (TAF), will explore funding inclusive projects targeting development of suppliers within the free-range poultry value chain.

For further information, please contact:
Brian Frimpong,
Managing Partner,
Email: bfrimpong@zebuinvestments.com

Jordan Minkin,
Investor Relations Analyst
Email: jminkin@zebuinvestments.com

ZEBU COMMITS $6.5M TO AMC TRADE FINANCE TO BOOST UNDERSERVED SME TRADE IN AFRICA

Zebu Investment Partners GP Limited (ZIP) has successfully closed its investment in AMC Trade Finance Limited (AMCTF) through its sophomore fund, Africa Food Security LP (AFS LP). AMCTF is a specialist trade finance institution, providing bespoke, secured and structured trade finance solutions for Africa-focused trade. The investment from AFS LP is a combination of equity and preference shares, enabling AMCTF to leverage and expand its loan book, to benefit trade and SMEs across Sub-Saharan Africa.

With its inaugural transaction in 2016, AMCTF has since completed transactions in soft commodities such as cocoa, cashew and coffee, facilitating export and import trade in African countries including Cameroon, Ghana, Kenya, Nigeria and Tanzania with a strategy to bolster its Pan-African origination, going forward. A recent AfDB and Afreximbank report estimates the African trade finance gap as of 2019 at US$81 billion (from a peak of US$120 billion in 2011), with SMEs being the most adversely impacted. This gap has been further exacerbated by the Covid-19 pandemic, due to impediments in logistics, production and trade. For a continent still heavily reliant on world markets, the potential detrimental impact on perennial challenges such as food security cannot be over-emphasized. The implementation of Africa Continental Free Trade Area (AfCTFA) is expected to improve trade within the continent at the SME level, which will mostly be food and agriculture-based products. These trade activities will elevate at least 30 million households from poverty.

ZIP Managing Partner, Brian Frimpong, notes the Covid-19 pandemic impact on food security across the continent; “We believe that food security is a basic human right, and the pandemic came at a time when Africa was still grappling with food scarcity issues, with an estimated 73 million people on the continent acutely food insecure. AMCTF’s secured trade financing model is ideally positioned to enable our fund’s mandate of catalyzing increased food security within the continent. We look forward to our partnership with AMCTF, which we believe can play an instrumental role in accelerating Africa’s post-pandemic economic recovery.”

Co-founders, Cobus Visagie and Jan Louis van den Berg, both PwC South Africa trained Chartered Accountants, are passionate about unlocking the potential of African SMEs. Cobus, AMC Group CEO, explains the reason the Company has decided to partner with AFS Fund; “The investment of the Africa Food Security Fund in AMC Trade Finance comes at a very opportune time for us as an SME focused boutique specialist lender to address the need for trade finance and fill the void created by Covid restrictions and liquidity concerns for local banks on the continent. The AMCTF founders and management are excited to broaden its client network and collective deal making expertise with the very experienced Zebu team. Zebu’s focus on SMEs in the food and Agri value chains is complementary and strongly aligns with AMCTF’s vision of providing structured trade and commodity finance for high impact sectors in Sub-Saharan Africa.”

The AFS LP’s Technical Assistance Facility (TAF), once fully funded, will explore funding inclusive projects targeting agricultural input suppliers and exporters within the SME value chains.

www.zebuinvestments.com

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ZIP Managing Partner, Brian Frimpong, notes the Covid-19 pandemic impact on food security across the

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ZEBU INVESTS IN SOUTH AFRICAN AGTECH PLATFORM SET TO REVOLUTIONIZE THE SECTOR

Zebu Investment Partners GP Limited (ZIP) through its sophomore fund, The Africa Food Security Fund, has successfully closed its investment in South African Ag-Tech company IQ Logistica (IQL). IQL is the owner and developer of a cloud-based platform used to collect, collate, and aggregate data for the purposes of tracing agricultural outputs and related key data as these progress through the value chain. The AFS Fund focuses on food production and processing across Africa, underpinned by the assertion of the positive impact which investing in the agricultural value chain can have for food security. This investment represents the fund’s first foray into the Ag-Tech sector.

The genesis of IQL in 2015 was ignited by an effort to improve the South Africa cotton industry’s capacity and competitiveness and was supported by multiple stakeholders including the Department of Trade and Industry (DTI). This big data platform which has been built, has enabled complete value chain visibility within the cotton industry of South Africa (from farmer to retail store), with the ability to expand across various other agricultural value chains and countries. This presents an opportunity for high-growth and meaningful impact on a continent where Agriculture plays a pivotal role in providing livelihoods and contributing to GDP. It is well documented that the use of technology within the Agricultural sector can transform the industry and drive tangible impact for smallholder farmers and small and medium enterprises. The CEO and founder of IQ Logistica, Thomas Robbertse, believes that the Company has the potential to revolutionize the industry, “IQL sits at the center of a disruptive movement – where farmers can be judged by their performance and not their balance sheets. IQL is enabling farmers to raise their profiles while providing services such as dedicated market access, competitively priced inputs, and access to finance and insurance. All these services reduce cost, remove uncertainty, and put more money back in the pockets of these essential workers”.

The AFS Fund will acquire a majority stake in the Company, through equity funding.

In commenting on why the Company chose a private equity fund this time around, Thomas Robbertse asserted “when we began our search for growth capital for IQL, we all agreed that it was imperative that any funder would have to understand the nuances of African agriculture. Zebu as a private equity team understands the journey of agriculture from farm to retail – we look forward to leveraging the relationships of Zebu as well as sharing ours to grow our ecosystems together. The additional resources such as the TAF (Technical Assistance Facility) will extend our reach to farmers, small or large across the continent, which is really exciting for the team”; he further added, “this investment allows IQL to scale up our business quickly while enabling us to carry the upfront cost of customer acquisition and development in Africa’s nascent ag-tech sector”.
The AFS Fund’s Technical Assistance Facility (TAF), once fully funded, will explore the possibility of funding inclusive projects targeting agricultural input suppliers and smallholder farmers within the respective value chains.

ZIP Senior Managing Partner, Dennis Matangira, said in a statement “at a time when the Covid-19 pandemic has further illuminated the need for traceability and transparency within food value chains, IQL presents us with an opportunity of not only resolving these pertinent issues; but also addressing the challenges of primary agriculture in Africa such as facilitating access to finance, and enabling efficient markets based on information symmetry”, he also highlighted “AFS Fund’s value creation team will be working with IQL to ensure successful expansion of the platform within other agricultural value chains and regions, empowering us to deliver on our impact mandate of food security, diversity, and improving livelihoods- all whilst ensuring attractive and sustainable risk-adjusted returns for our LP’s. We look forward to the partnership with IQ Logistica in unlocking the power of big data within the African agricultural landscape”.

The AFS Fund achieved first close at US$84 million in 2018, with final close expected in December 2020 at a target of US$100 million.

The AFS Fund TAF is in the process of first close and will be managed and implemented by TechnoServe.

www.zebuinvestments.com

THE AFS LP INVESTS IN LEADING TANZANIAN QSR RETAIL BAKERY CHAIN

The sophomore fund of Zebu Investment Partners GP Limited (ZIP), the Africa Food Security Fund, has successfully closed its investment in Royal Oven Limited, Tanzania. Royal Oven is a leading QSR retail bakery chain, offering a diverse range of products which innovatively combine traditional Tanzanian food with international bakery trends. The AFS Fund focuses on food production and processing throughout Africa, underpinned by the assertion of the positive impact which investing across the consumer value chain can have for food security, through improved reliability of the supply chain for processors.

Royal Oven opened its first retail bakery in 2008 in Dar es Salaam and has since grown to 19 stores across Tanzania. The Company operates a central kitchen and bakery in key hubs, ensuring consistent quality and freshness of products to consumers daily. Tanzania has been one of Sub-Saharan Africa’s most rapidly growing economies, albeit plagued with infrastructure gaps and an inefficient product supply chain, touted by investors as an impediment to retail expansion in the country. Royal Oven’s ability to expand with various store size options and control its supply chain has made it agile and resilient in what some might see as a challenging operating environment.

“We’ve built Royal Oven over the past decade, with a relentless pursuit for superior quality, customer centric service and distinguished taste – entrenching our brand in the minds of consumers. We are excited to partner with AFS Fund, which will enable us to realise our strategy of creating a Tanzanian-grown quick-service restaurant (QSR) offering with a significant Sub-Saharan Africa footprint. Expansion of Royal Oven’s product offering and route to market will also have ripple effects for our suppliers and consumers across the spectrum, which is core to our purpose”, said Exaudi Kiwali, Executive Chairman and Co-Founder of Royal Oven.

“Royal Oven is an ideal candidate for our mandate, which seeks transformative opportunities in a way that creates a real standard around food security on the continent, whilst partnering with strong, committed and proven management teams who are open to the value-add associated with private equity partners. We look forward to the partnership with Royal Oven, in creating a Tanzanian QSR with wider ecosystem positive impact, whilst upholding international food and safety standards,” Zebu Senior Managing Partner, Dennis Matangira, said in a statement.

The AFS Fund’s Technical Assistance Facility (TAF), once fully funded, will explore the possibility of funding inclusive projects targeting suppliers and continuing to expand the Company’s product offering to capture Base of the Pyramid (BoP) consumers.

The AFS Fund achieved first close at US$84 million in 2018, with final close targeting US$100 million.
The AFS Fund TAF is in the process of first close and will be managed and implemented by TechnoServe.

www.zebuinvestments.com

The African Agriculture Fund’s Technical Assistance Facility launches A €230,000 Agrodealer Capacity Building Scheme in Madagascar

The Technical Assistance Facility (TAF) of the African Agriculture Fund (AAF) is pleased to announce the awarding of a project of €230,000 to Zariro Consulting (Pty) Ltd, for the implementation of an Agro-dealer Capacity Building Scheme in Madagascar. This 18-month project’s overall goal is to sustainably increase the yield and hence income of smallholder farmers in Madagascar. The expected outcome is an increased use of fertiliser in growing import-substituting or export oriented crops and this will be achieved by training and facilitating finance for the agro-dealers, training smallholder farmers through the agrodealers and connecting farming communities with limited agro-input access to agro-dealers. The project is being implemented in collaboration with Guanomad, a private company with its head office located in Antananarivo, Madagascar.

In 2013, the AAF SME Fund, a sub-fund of the AAF and managed by Databank Agrifund Manager Limited (DAFML), invested in Guanomad, which is primarily a producer of guanobased organic fertilizers. Guanomad has been in the business of producing organic fertilizers since 2005. The Company’s products are competitively priced relative to imported organic and inorganic fertilizers and thus it is well positioned to capture significant domestic market share. The Company’s products are also Ecocert certified, enabling it to export to the EU and the Americas.

The project aims to engage at least 100 of the 200 agro-dealers who are part of Guanomad’s nationwide distribution network. Interventions at the agro-dealer and farmer levels will aim to increase the volume of fertiliser sold to smallholder farmers by at least 25% on average. The project will also link at least 10 farmer communities with limited agro-input access to agro-dealers.

“Guanomad’s mission is to tackle food insecurity by encouraging agriculture and improving farmers’ access to agricultural inputs. Through this Technical Assistance Facility project, agro-dealers will be involved in selling Guanomad’s products to bring our fertiliser closer to the consumers. Thanks to TAF assistance, an export strategy and a sales & marketing project have also been implemented to expand Guanomad’s distribution network and strengthen our local marketing efforts”, says Erick Rajaonary, CEO of Guanomad.

Databank awarded Deal of the Year (Small Cap) at Private Equity Africa Awards

For the second consecutive year, Databank Agrifund Manager Limited (DAFML) was presented with the Private Equity Africa Deal of the Year (Small Cap) award during the PEA awards ceremony in London.

The fund manager was recognized for its investment in MOABLAOU, the largest table eggs business in Burkina Faso.

Following what has been an exceptionally strong year for private equity in Africa, the 4th Private Equity Africa PEA Awards celebrated the achievements in the market, focusing solely on the best-in-class achievements of investors and advisors in the industry. The ceremony, which was hosted at the prestigious Grosvenor House, London, saw 21 firms collect accolades in recognition of their investment and advisory services across Africa. Award recipients were selected by an independent panel of highly respected industry participants.

Brian Frimpong, Managing Partner of DAFML, received the award on behalf of the fund manager. He commented that such a repetition of success in a growing competitive market was not a coincidence. “The niche role played by DAFML along the private equity value-chain is core to the success of African private equity, as well as the companies who rely on the industry across the continent.” He added that the investment in MOABLAOU represented another venture by DAFML into a frontier market which was unpopular to private equity but had exciting untapped opportunities.

Ken Ofori-Atta, founder of Databank Group echoed that “ these awards embolden us to doggedly pursue our commitment to bring both capital and expertise to the SME Agriculture sector in Africa, the most critical but weakest and difficult link to achieve not only food sufficiency but to also create jobs and propel industrialization.”

In her closing remarks, Gail Mwamba, the Awards Chair and Editor of Private Equity Africa, said: “As the dynamic private equity market in Africa continues to go from strength to strength, this year’s awards have distinguished the innovative investment and advisory work and some of the region’s most transformative deals over the last year.”

Since its inception in 2012, DAFML has made investments in 8 companies across Sub-Saharan Africa (Burkina Faso, Cameroon, Ethiopia, Nigeria, Madagascar, South Africa, Zambia, and Zimbabwe) through its AAF-SME Fund.

Technical Assistance Facility of the African Agriculture Fund

View the video below.