AATIF provides USD 11m to African Milling Limited
AATIF concludes a USD 11m facility with African Milling Limited (“AML”) to finance the purchase of wheat and maize for its processing facility in Zambia. CMI will act as collateral agent taking stock of goods purchased and released.
AML is an established family business running a wheat and maize mill since 2006. The business started off with a maize mill and silos and has since expanded to include wheat milling operations. Wheat and maize will be purchased locally from smallholder and commercial farmers using the funds received by AATIF. Maize will be processed into breakfast meal, roller meal and maize bran used for stock feed, while wheat will be processed into wheat flour for human consumption and wheat bran used as livestock feed. Final products will be packaged and sold on the local and regional markets in East and Central Africa.
For AATIF this will be the first collateral based facility therewith broadening the financing products offered to the market. The new product will offer financing solutions to local processors and exporters who are in need of large liquidity amounts for a relatively short period of time during the year, an offering sometimes challenging for local financial institutions given the relatively large amounts and the unknown funding tenor. In addition to the long-term funding offered by AATIF to date, AATIF will now also be able to address short-term and more cyclical funding needs which are vital in the agricultural sector to secure funding as and when needed. AATIF considers the new product as strategic, enabling its objective in fostering local value addition and regional trade of key staple foods.
Doris Köhn, member of the Investment Committee and the Board of AATIF said that “Zambia remains to be a key producer of wheat and maize in the region and therewith a critical contributor to food security in southern Africa. Companies such as AML contribute by providing an off-take market to local farmers, ensuring value addition is done within Zambia and further providing job opportunities in the processing sector. This is very much in line with AATIF’s mission”.