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Databank invests in High Impact Poultry in Burkina Faso

In the last quarter of 2014, the AAF SME Fund, a private equity fund focused on African food production and processing, managed by Databank Agrifund Manager Limited (DAFML), successfully closed its investment in MOABLAOU, the largest producer of table eggs in Burkina Faso.

Although the transaction happened during the instatement of a transitional government in Burkina Faso, Databank’s unwavering commitment to the investment was a display of its confidence in both the potential of MOABLAOU as an enterprise, and the future of a country on the brink of policy-reforming change.

MOABLAOU is a family owned business with almost three decades of poultry management experience. Built on the premise that poultry farming is as much a science as it is an art, the company has succeeded in securing market leadership and is the sole industrial producer of table eggs in the country; the company farm in the town of Nambé, is equipped with state of the art facilities and supplies over 25% of the country’s table eggs. MOABLAOU strategically opted for vertical integration and operates its own feed mill in the capital city of Ouagadougou. The inhouse mill ensures that the company’s hens are fed with the highest quality feed and that customers in turn receive only the highest grade of nutritious eggs. Through a network of over 400 small retailers (mostly women), MOABLAOU provides low and middle-income populations with affordable egg protein and contributes to tackling the problem of protein deficiency, which is rampant in African nations. The company also fights actively against poverty through the indirect jobs created from the sales of its products.

Despite MOABLAOU’s market leadership, the company’s growth story has only begun and is being further propelled by Burkina Faso’s position as a net importer of eggs. Commenting on the investment and prospects, DAFML Managing Partner, Brian Frimpong, asserted that “available capital to support Africa’s growing economies are in abundance but the real value is in identifying high impact companies or niche players that are at the vortex of sustainability in frontier markets such as Burkina Faso. DAFML studied MOABLAOU for over 24 months to understand the rare dynamics of both the operations and the surrounding macro conditions before deploying capital to support MOABLAOU’s prospects”. In his response, Mr. Abou Ouattara – CEO of MOABLAOU, thanked the Partners of DAFML for the confidence they have placed in him and his enterprise. He affirmed the benefits and opportunities that the investment offers him, his family and his company as a whole and also restated his commitment, and that of all MOABLAOU workers to achieve the objectives set out by the two parties.

Funding from the AAF SME Fund included a mix of equity and mezzanine financing to support MOABLAOU’s expansion plans and further extend its market reach.

In conjunction with this investment, the AAF’s Technical Assistance Facility (TAF) is exploring projects that will provide technical assistance to MOABLAOU and enhance its growth strategy, marketing and distribution. The TAF also plans to fund projects that will support smallholder farmers supplying the business with soya and micro entrepreneurs distributing MOABLAOU eggs, potentially improving the income of hundreds of small entrepreneurs linked to the company.

The AAF SME Fund is a sub-fund of the Africa Agriculture Fund (AAF), managed by Phatisa.

The AAF TAF is primarily funded by the EU, managed by the International Fund for Agricultural Development (IFAD) and implemented by TechnoServe.

The project received additional donations from the Alliance for a Green Revolution in Africa (AGRA), Italian Development Cooperation and the United Nations Industrial Development Organisation (UNIDO). www.dafml.com Press contact detail: Brian Frimpong, Managing Partner, +233 (0) 248 162 803 bfrimpong@dafml.com

Databank recognised at The Third Private Equity Africa Summit & Awards

Databank Agrifund Manager Limited (DAFML), the private equity affiliate of Databank Group, reaffirmed its leadership in the SME investment space by being recognized at the Private Equity Africa (PEA) Summit and Awards in London, UK. The event, which was held on 5 June 2014, highlighted the growing emergence of private equity as an asset class in African investments and the attraction of reputable companies that can improve their capital structures via private equity investments.

The “Small Cap Deal of the Year” award went to DAFML, Databank for its investment in Guanomad, an organic-fertiliser processor in Madagascar and the “Special Recognition Entrepreneur” award, the first of its kind, co-sponsored by Private Equity Africa and Forbes Africa, was awarded to Tosan Jemide, CEO of Topcrust, a food-processing company and an AAF SME Fund portfolio company, based in Nigeria.

Brian Frimpong, Managing Partner – DAFML, received the Databank award. He emphasised the quality of teamwork that has driven the core success of the AAF SME Fund, which was launched in February 2012.

Brian asserted that “…it takes a high calibre of talented individuals in a team to select high-quality transactions that have a ripple effect of supplying sufficient amount of capital, building sustainable enterprises and carving out measurable impact for the communities in which these businesses operate.” Brian also praised Tosan Jemide, CEO of Topcrust, for “…his passion and dedication to growing Topcrust and reflecting the examples of sound leadership that encourages a partnership with a private equity firm such as Databank.”

Dennis Matangira, Senior Managing Partner – DAFML, affirmed “…Erick Rajaonary of Guanomad and Tosan Jemide of Topcrust are excellent examples of pioneers in their respective niches that deserved recognition. Databank shares in their success and believes that from its interaction with entrepreneurs, the future looks promising.”

Since AAF SME Fund’s investment in Guanomad in July 2013, the portfolio company has received various recognitions. This PEA award attributed to Guanomad comes on the heels of the company winning the “Outstanding Small and Growing Business” award at the 2013 Africa Awards for Entrepreneurship, sponsored by the African Leadership Network.

The AAF SME Fund is a sub-fund of the Africa Agriculture Fund (AAF), managed by Phatisa.

The AAF TAF is primarily funded by the EU, managed by the International Fund for Agricultural Development (IFAD) and implemented by TechnoServe. The project received additional donations from the Alliance for a Green Revolution in Africa (AGRA), Italian Development Cooperation and the United Nations Industrial Development Organization (UNIDO).

Databank concludes fertilizer investment in Africa’s largest PE market

The AAF SME Fund, a private equity fund focused on African food production and processing, managed by Databank Agrifund Manager Limited (DAFML), has successfully closed its investment in Avison, a fast-growing organic and integrated fertilizer business in South Africa.

The investment results from the merger of two businesses: Avison, which specializes in the production of pelletized chicken manure, and FMO Organics, which engages with agronomists to design plant-nutrient solutions for clients based on integrated fertilizer products. Together, the combined entity is poised to become a dynamic player in a country where organic fertilizers have seen an upward trend, with annual inorganic fertilizer requirements estimated at 2 million tons.

Avison has its main operations in Worcester in the Western Cape, where it runs composting and pelletizing facilities. With access to over 105 experienced agents in the Western Cape, the company has a solid competitive advantage to expand production. Its branded products have proven effective in increasing yields, improving soil fertility and ensuring long-term micronutrient build-up. With an impressive product line-up including various integrated fertilizers, as well as Avison Enhancer, Avison Enhancer S and Avison Stimulator, Avison has enjoyed significant patronage by the local community and will continue to focus its sales on both the domestic market and neighboring countries.

The AAF SME Fund initially provided a mix of equity and mezzanine funding and recently injected a follow-on investment to further assist the company’s expansion plans across southern Africa.

In conjunction with this investment, the AAF’s Technical Assistance Facility (TAF) is exploring projects that will provide technical assistance to Avison to enhance its growth strategy, marketing and distribution. It is expected that these projects will not only build the capacity of the company, but also create local employment opportunities by extending Avison’s distribution channels.

Jurie Groenewald, CEO of Avison, specified that “the AAF SME investment in Avison has given us very important access to a growing African market. Food security, being the main focus of most responsible agriculture businesses in Africa, is also the main drive for Avison. Our partnerships, in particular with Databank, have enhanced our business not only with respect to superior management support but also our footprint across the food basket of Africa. At Avison we follow a holistic approach to farming and because Databank follows our
aforementioned approach, this partnership is destined to succeed.”

DAFML Senior Managing Partner, Dennis Matangira, affirmed that “the investment strengthened Databank’s fertilizer platform strategy, and demand for organic fertilizer in southern Africa represents an important step in fulfilling the continent’s food-security requirements. Making inputs such as fertilizer accessible to both commercial and small-scale farmers via inclusive delivery methods is critical to improving yields and building sustainable returns for farmers.”

The AAF SME Fund is a sub-fund of the Africa Agriculture Fund (AAF), managed by Phatisa.

The AAF SME Fund enters Nigeria via investment in bakery

The AAF SME Fund, a private equity fund focused on African food security and impact, managed by Databank Agrifund Manager Limited (DAFML), has successfully closed its investment in Topcrust Bakery, a fast-growing consumer bakery and distributor of bread across Lagos, Nigeria.

Topcrust produces high-quality bread for the Lagos market. The Company is focused on increasing its output to serve one of the largest cities in Africa and also plans to open distribution centers in nearby cities to enable a homogenous, fast delivery to customers across Nigeria.

The AAF SME Fund is providing a mix of equity and mezzanine funding, with a further option of supplying additional investment to assist Topcrust to grow its production capacity and market.

In conjunction with this investment, the AAF’s Technical Assistance Facility (TAF) is exploring projects that will provide technical assistance to Topcrust to enhance its growth strategy, marketing and distribution. It is expected that these projects will not only build the capacity of the local Topcrust management team, but also create local employment opportunities by extending Topcrust’s distribution channels.

“We conducted a detailed review of both the opportunity and players in the food consumption market. Topcrust’s growth model, brand recognition and management team represented an attractive proposition for our investment mandate. Nigeria’s robust consumer market offers a tremendous platform for niche players such as Topcrust to further define their consumer base,” DAFML Managing Partner, Brian Frimpong, said in a statement.

“At Topcrust Bakery Limited, we are most delighted with this partnership; we believe that the investment provides us with leverage to optimise our capacity, accelerate growth, and positively contribute to the development of the Nigerian economic landscape. Working with the DAFML team in the past few months has been a most fulfilling experience for us as a business and we are excited at the future prospects” added Tosan Jemide, the CEO of Topcrust, who is also known for his famous Cakes by Tosan.

The AAF SME Fund is a sub-fund of the Africa Agriculture Fund (AAF), managed by Phatisa.

The AAF SME Fund invests in Zambian food and beverage production company

The AAF SME Fund, a private equity fund focused on African food production and processing, managed by Databank Agrifund Manager Limited (DAFML), has successfully closed its investment in Matonjeni Marketing, (http://www.matonjeni.com/), an upcoming food and beverage company focusing on the production, processing and marketing of beverages and food enhancers.

Matonjeni’s branded food and beverage products include Ochardlain, Citrade, First Harvest, Nektarade, Shambala, Rage and Dawnridge. The Company is focused on the domestic market and is currently in all major towns of the Zambian market and also plans to open distribution hubs all across Zambia.

The AAF SME Fund is providing a mix of equity and mezzanine funding with a further option of supplying additional investment to assist Matonjeni to grow its production capacity and market.

In conjunction with this investment, the AAF Technical Assistance Facility (TAF) is exploring projects that will provide technical assistance to Matonjeni in terms of its management information system, marketing and distribution. It is expected that these projects will not only build the capacity of the local Matonjeni management team, but also create local employment opportunities within Matonjeni’s marketing and distribution channels.

“Matonjeni is an ideal candidate for our mandate to expand value added services such as local processing, while partnering with strong, committed management teams that are open to the value-add associated with private equity partners. The Company has unique brands that require years and profound expertise to replicate,” DAFML Senior Managing Partner, Dennis Matangira, said in a statement. “The holistic approach of the AAF SME Fund to not only fund the Company, but insistence on finding ways to increase stakeholder involvement as well as extension programmes for selfemployed vendor networks through the Technical Assistance Facility, made them a very attractive partner for Matonjeni,” added Mr Mayor Mangeya, the CEO of Matonjeni.

The AAF SME Fund is a sub-fund of the Africa Agriculture Fund (AAF), managed by Phatisa.

The AAF SME Fund invests in leading Zimbabwe agri-processing company

The AAF SME Fund, a private equity fund focused on African food production and processing, managed by Databank Agrifund Manager Limited (DAFML), has successfully closed its investment in Interfresh Limited, Zimbabwe. Interfresh is a leading agribusiness focusing on the production, processing and marketing of agricultural and allied products and services.

Interfresh is a Zimbabwe-based diversified agri-business company, engaged in the business of producing, processing and marketing agricultural and allied food products in both the local and export markets. The Company operates in five divisions:

Citrus, a producer of citrus which is sold locally, processed into juice and juice concentrates and exported into the region and international markets;
crops, which is involved in the production of cash crops, such as maize, soya beans and wheat;
horticulture, a producer of vegetables for both formal retail and informal markets;
beverages, which is a producer of fruit-based concentrates and oils for both local and international markets; and fast moving consumer goods, which focuses on importing a range of food and beverage products for the local market.

It also manufactures a range of products under the Marlon Fine Foods trademark.

The AAF SME Fund and senior management of the Company structured a management buyout (MBO) funded by a mix of equity and mezzanine funding. Given that Interfresh is publicly listed on the Zimbabwe Stock Exchange (ZSE),and in order to accommodate all current stakeholder interests, the final structure evolved over eight months and culminated with a share rights offer that resulted in the desired shareholding profile. The final MBO structure is compliant with Zimbabwean indigenisation laws and also provides an empowerment platform for management.

In conjunction with this investment, the AAF’s Technical Assistance Facility (TAF) will fund a €250 000 smallholder support scheme. This two-year development programme will integrate a minimum of 200 local smallholder farmers into the supply chain of Interfresh. The Company will process the produce purchased from the smallholder farmers before reselling it in the formal market. Through this project, farmers will benefit from guaranteed access to market, as well as business and technical training, while the company will be able to expand its supply base. As such, the project will be beneficial for both parties.

“Interfresh is an ideal candidate for our mandate to increase food security in Africa in an environmentally conscious way, while partnering with strong, committed management teams that are open to the value-add associated with private equity partners. The Company has unique citrus assets that require years and profound expertise to replicate,” DAFML Senior Managing Partner, Dennis Matangira, said in a statement. “The holistic approach of the AAF SME Fund to not only fund the Company, but insistence on finding ways to increase stakeholder involvement as well as extension programmes for outgrowers though TAF, made them a very attractive partner for Interfresh,” added Lishon Chipango, the CEO of Interfresh.

The AAF SME Fund is a sub-fund of the African Agriculture Fund (AAF), managed by Phatisa.

The AAF TAF is primarily funded by the EU, managed by the International Fund for Agricultural Development (IFAD) and implemented by TechnoServe. The project received additional donations from the Alliance for a Green Revolution in Africa (AGRA), Italian Development Cooperation (IDC) and the United Nations Industrial Development Organisation (UNIDO).

The AAF SME Fund invests in leading Madagascar Organic Fertilizer Company

The AAF SME Fund, a private equity fund focused on African food production and processing at the small and medium enterprise (SME) level, managed by Databank Agrifund Manager Limited (DAFML), has successfully closed its investment in Guanomad S.A., Antananarivo, Madagascar. Guanomad is a leading producer of guanobased organic fertilizer products, which are an affordable and effective alternative to the traditional chemical fertilizers.

Guanomad has been in the business of producing organic fertilizers since 2005. Agriculture is a key sector in Madagascar and the country relies heavily on imported fertilizers. The Company’s products are competitively priced relative to imported organic and non-organic fertilizers and thus it is well positioned to capture significant domestic market share. Being a leading producer in the region, Guanomad also receives strong support from the government and has been selected in the past to supply fertilizers in government and NGO initiatives to improve agricultural productivity. The Company’s products are also Ecocert certified, enabling it to export to the EU and the Americas. The Company is well known in the local rural communities where it provides advice and support in organic farming and advocates environmental and social topics including rural development, reforestation and education.

The AAF SME Fund is providing a mix of equity and mezzanine funding with a further option of supplying additional investment to assist Guanomad to grow the Company’s production capacity. The Company’s progress was hamstrung by the local economic crisis resulting from political unrest that erupted in 2009. Since then Madagascar’s macro economy has steadily been recovering and international investment has been on the increase. Agriculture employs approximately 75% of the country’s workforce and contributes 28% to GDP.

‘Given the lack of large scale organic fertilizer suppliers in the world, scarcity of local financial institution support and increasing appetite for nonpolluting fertilizers and organic foods, the idea of such an investment is laudable,’ adding ‘When one invests in a venture such as Guanomad; you are financing everybody in the immediate area, creating the capacity not only to develop small holder farming in Madagascar, but also changing the food picture on the ground’, said Erick Rajaonary, Chief Executive Officer and Founder of Guanomad.

The AAF’s Technical Assistance Facility (TAF) will explore the possibility of funding a smallholder support scheme that would enhance the yields and incomes of farmers using Guanomad’s products. The TAF is also able to fund capacity building initiatives for the company itself.

‘Guanomad is an ideal candidate for our mandate to increase food security in Africa in an environmentally conscious way while partnering with strong committed management teams that are open to the value-add associated with private equity partners. Fertilizer use in Madagascar is far below that of more developed economies. Increased use of Guanomad’s fertilizer products could significantly increase smallholder farmer productivity and income’, DAFML Senior Managing Partner, Dennis Matangira, said in a statement.

The AAF SME Fund is a sub-fund of the Africa Agriculture Fund (AAF), managed by Phatisa.

The AAF TAF is primarily funded by the EU, managed by the International Fund for Agricultural Development (IFAD) and implemented by TechnoServe. The project received additional donations from the Alliance for a Green Revolution in Africa(AGRA), Italian Development Cooperation and the United Nations Industrial Development Organisation (UNIDO).

The AAF SME Fund invests in Cameroonian Commercial Farm

The AAF SME Fund, managed by Databank Agrifund Manager Limited (DAFML), has successfully closed its first transaction with an investment in West End Farms (WEF). This SME venture is one of the leading mixed farming enterprises in Cameroon with farms and a cattle ranch across various locations in the country.

The AAF SME Fund, which first closed in February 2012 at US$ 30 million and has a final target size of US$ 80 million, is a private equity fund focused on African food production and processing at the small and medium enterprise (SME) level.

WEF has been in the farming business for over 30 years and has an extremely dedicated management team that has grown the company to be a major supplier to the poultry industry in country. The Ndakoa maize and soya farm is ideally located in a region that has two full rain seasons, allowing for double cropping with no need for irrigation infrastructure.

The AAF SME Fund is providing a mix of equity and mezzanine funding, with a further option of supplying additional investment to assist WEF to potentially develop more land in the Nanga Eboko region. It is also important to note that the aforementioned land is on a long-term lease from the community with support of the Government of Cameroon, to encourage and develop commercial farming in the country.

Cameroon’s natural resources are very well suited to agriculture and an estimated 70% of the population is involved in farming. Agriculture comprised an estimated 19.8% of GDP. “Given the lack of commercial farming expertise, scarcity of local financial institution support and increasing appetite for commercial agriculture projects in Cameroon, the idea of such a significant investment is laudable,” adding “When one invests in a venture such as West End Farms; you are financing everybody in the immediate area, creating the capacity not only to develop the SME venture, transferring technical know-how and expertise to the smallholders, but also changing the food picture on the ground”, said Julius Manjo, Director West End Farms.

With the support of the AAF Technical Assistance Facility (TAF), West End Farms will receive agronomic TA from leading precision farming consultant, Farmsecure Agri Science (Cape Town, South Africa). West End Farms has also recently recruited animal husbandry professionals from the Philippines. Central Africa still lags behind Southern Africa in commercial farming and the AAF SME Fund plans to enable WEF to be a commercial farming model in the region to encourage other investors to finance sub-Sahara tropical commercial farming enterprises.

“West End Farms is an ideal candidate for our mandate to increase food security in Africa while partnering with strong committed management teams that are open to the value-add associated with private equity partners,” DAFML Senior Managing Partner, Dennis Matangira, said in a statement. DAFML’s investment in West End Farms represents a bold step into Central Africa commercial farming and acts as a springboard for similar private equity, food and agri transactions in the region.

The AAF SME Fund is a sub fund of the Africa Agriculture Fund (AAF), managed by Phatisa.

The AAF TAF is primarily funded by the EU, managed by IFAD and implemented by TechnoServe. The AAF TAF received additional donations from the Alliance for a Green Revolution in Africa (AGRA), Italian Development Cooperation and United Nations Industrial Development Organisation (UNIDO).

Technical Assistance Facility for the African Agriculture Fund is launched

TAF will provide technical assistance to agriculture and food related businesses.

October 20, 2011 – The 10-million Euro (US$ 13.3 million) Technical Assistance Facility (TAF) linked to the African Agriculture Fund (AAF), a private equity fund, managed by Phatisa, has been launched.

AAF was specifically designed to address food security challenges across the African continent. Reaching its first closing at US$ 151 million and commencing operations in January 2011, the AAF has a total target size of US$ 300 million. At first close, US$ 30 million of the fund has been allocated to investments in small and medium enterprises (SMEs) through the dedicated AAF SME Fund. The purpose of the TAF is to provide technical assistance to agriculture and food related businesses that receive investment through the AAF, allowing them to create new opportunities for smallholder farmers, farmer business groups and rural communities. TechnoServe has been appointed to implement the day to day activities of this facility.

The Technical Assistance Facility is funded primarily by the European Union and managed by the International Fund for Agricultural Development (IFAD). IFAD was instrumental in developing the concept of the TAF and will supervise its activities and impacts. IFAD will also provide technical, field-level expertise, and access to its network of projects to support the TAF. The Italian Development Cooperation, the United Nations Industrial Development Organisation (UNIDO), the Alliance for a Green Revolution in Africa (AGRA) and the AAF are co-sponsors.

The assistance provided through the facility will focus on three main areas: creating outgrower systems that connect smallholders with investee companies, improving the business operations of SMEs invested in by the AAF SME Fund and promoting financial services in rural areas. As implementer of the Technical Assistance Facility, TechnoServe will work with Phatisa to identify the needs of the investee agribusinesses, develop proposals for support, identify providers to deliver this support and manage the delivery of projects to address these needs.

Through these projects, more than 20,000 smallholder farmers across Africa are expected to benefit from more predictable markets, higher yields and increased incomes. These farmers also will gain access to a broader range of financial products and services. The portfolio companies of the AAF are also projected to generate between 2,100 and 4,300 direct jobs, helping to drive the creation of thousands more.

For more information, please visit the TAF page on the Phatisa website.

About Technoserve

TechnoServe empowers people in the developing world to build businesses that break the cycle of poverty. A growing enterprise generates jobs and creates 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 40 countries. The Financial Times has rated TechnoServe one of the top five NGOs for corporate partnerships. TechnoServe’s corporate partners include Cargill, The Coca-Cola Company, General Mills, Goldman Sachs, J.P. Morgan, Nestlé-Nespresso, Olam International and Unilever, among others. Charity Navigator has also awarded its highest Four Star ranking to TechnoServe.

Sarah Holmes, the appointed Senior TAF Advisor, is a senior manager and business development specialist. As Business Development Manager for TechnoServe’s West and Southern Africa division she has led program design for initiatives in Ghana, Côte d’Ivoire, South Africa, Swaziland, Mozambique, Zambia and Zimbabwe, has a deep understanding of the local sub-Saharan African business environment, and experience applying successful approaches to identify needs and tailor support for agribusiness-SMEs. Sarah brings significant experience from the private sector having served as a strategy consultant for over five years at Bain & Company. Sarah has worked and lived in Africa, France, Portugal, India and China.

About Phatisa

Phatisa is a private equity fund management company, operating across sub-Saharan Africa, with offices in Mauritius, South Africa, Zambia, Kenya and West Africa in the near future. Phatisa comprises a team with a significant track record of managing private equity funds and agricultural businesses throughout the continent. The entire Phatisa team is located in Africa and spends a considerable amount of time developing relationships with strategic partners in all countries where AAF is active. This ensures that AAF has reliable networks and information in the countries in which it invests. Team members have a reputation built up over the last decade, which can be seen in their track records, on-the-ground network, and access to agricultural players and facilities on the continent. Phatisa provides the experience necessary to invest, manage and successfully exit what will be one of Africa’s most pioneering agricultural private equity funds. www.phatisa.com

About IFAD

The International Fund for Agricultural Development (IFAD) works with poor rural people to enable them to grow and sell more food, increase their incomes and determine the direction of their own lives. Since 1978, IFAD has invested about US$13.2 billion in grants and low-interest loans to developing countries through projects empowering about 400 million people to break out of poverty, thereby helping to create vibrant rural communities. IFAD is an international financial institution and a specialized UN agency based in Rome – the United Nation’s food and agricultural hub. It is a unique partnership of 167 members from the Organization of the Petroleum Exporting Countries (OPEC), other developing countries and the Organisation for Economic Co-operation and Development (OECD).