Norfund finances Associated Foods Zimbabwe


A merchandiser packs AFZ products in one of the leading supermarkets in Harare

THE Norwegian Investment Fund for Developing Countries, (Norfund), has invested US$2 million in Associated Foods Zimbabwe Ltd (AFZ) one of Zimbabwe’s leading producer of peanut butter and jam spreads.

“We are pleased to have found in Norfund a first-class partner with a deep understanding of the food and agribusiness sector, strong track-record and a well-rounded international network.” said Simba Nyabadza, AFZ Director and majority shareholder. Norfund is a private equity company established by the Norwegian Storting (parliament) in 1997 and owned by the Norwegian Ministry of Foreign Affairs.
Norfund’s investment will contribute towards capital expenditure, including a new state-of-the-art peanut butter production line, and working capital. Production will be consolidated at AFZ’s Vumba factory.
AFZ was established on January 1 2016, as a result of a merger between Honeywood Enterprises (Pvt) Ltd, Zimbabwe’s leading producer of jams, mainly under the “Farm Gold” brand, and Spread Valley (Pvt) Ltd, the country’s leading producer of peanut butter, mainly under the “Mama’s” brand.
The investment will also part-finance this merger.
“By combining the manufacturing strengths of Honeywood Enterprises with the sales, marketing and distribution strengths of Spread Valley, we aim to create the economies of scale and synergies in order to generate significant added value and efficiencies for all stakeholders, including customers,” said Nyabadza.
“This investment is in line with Norfund’s strategy to support profitable and sustainable, local enterprises in developing countries.  Agriculture is a priority sector for Norfund, as it employs approximately half of Africa’s workforce and plays an important role for economic growth and development. We look forward to being an active, strategic minority investor in AFZ with a long term perspective.” said Chishamiso Mawoyo, an Investment Manager in Norfund’s Food and Agribusiness department.
Most companies in the country have been reeling over the last few decades mainly due to failure to access reasonably priced funding and this led to de-industrialisation.
Where funding was available, it cameis as short-term money which is not suitable for recapitalization and retooling. Also the short-term funding came with punitive interest rates.
And yet food security, is one of the pillars of the country’s economic blueprint, the Zimbabwe Agenda for Sustainable Socio-Economic Transformation (ZimAsset).
Key responsibilities for the National Food and Nutrition cluster include emphasising production and promotion of the consumption of the country’s traditional foods; promoting healthy lifestyles and proper dietary practices; prioritizing investment in irrigation as well as transport infrastructure; intensifying and encouraging the growing of crops that are drought resistant; inculcating healthy eating habits in children and students throughout the education system; promoting development of technology to dry and preserve traditional foods; and linking the Food and Nutrition Security Policy with other sector policies in order to achieve policy coherence and effectiveness.
Value addition and beneficiation is another ZimAsset cluster under which companies such as AFZ are expected to contribute significantly.
Norfund is the Norwegian Investment Fund for Developing Countries. Established by the Norwegian Parliament in 1997, the organisation is the government’s main instrument for combatting poverty through private sector development. Norfund’s objective is to contribute to sustainable commercial businesses in developing countries. Funding is provided via capital allocations from Norfund’s development assistance budget. Norfund provides equity, other risk capital, and loans to companies in selected countries in Southern, Eastern and Western Africa, South-East Asia and Central America. With a portfolio of US$1,8 billon, Norfund invests in three main sectors: clean energy, financial institutions and agribusiness, in addition to small and medium sized companies through third-party investment funds.

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