The Africa Agriculture and Trade Investment Fund (“AATIF”) invests USD 5m in Mount Meru Millers Zambia - a leading edible oil producer
On 28 February 2019, AATIF finalised a USD 5m facility agreement with Mount Meru Millers, a leading edible oil producer in Zambia.
Mount Meru Millers Zambia belongs to the larger group of Mount Meru companies in Southern- and Eastern Africa active in the food processing, logistics, construction and petroleum sectors. The group of companies started as a family business in 1978 in Tanzania and has since expanded operations to nine African countries. Mount Meru Millers in Zambia produces edible oils and feed cakes as well as several smaller by-products from soya, sunflower, cotton and palm oil. Products are sold in local and regional markets. Mt. Meru buys 95% of the inputs from local commercial farmers and aggregators/traders while 5% is sourced from smallholder farmers. Through these activities, the company is contributing to the development of the agro processing sector in Zambia as well as import substitution by increasing access in the market of locally produced edible oil. Zambia imports at least 60% of its edible oil (both crude and refined). Mount Meru Millers currently accounts for about 20% of the market for edible oils.
AATIF’s loan of USD 5m with a tenor of seven years will be used to fund the expansion of the refinery capacity, (silo) storage capacity, processing capacity and packaging units in Zambia. Furthermore, AATIF seeks to work with the company on its local sourcing strategy, increasing its engagement with smallholder farmers producing sunflower and cotton seeds for further processing at Mount Meru Millers.
Senior management at Mount Meru stated, “we are very excited on the new partnership with AATIF and the funding made available will enable us to further expand our capacities as well as bring in new technology to the agri food processing sector. We foresee a long-term relationship in the making and this being a stepping stone opens various opportunities for both AATIF and Mount Meru. AATIF has also offered much valued technical assistance to Mount Meru, which in due course will provide invaluable insight into various fields within the business. TA support currently under discussion includes supporting the out-grower scheme Mount Meru has set-up in the soya and cotton sector, supporting feasibility studies for expansion plans into new segments and / or developing an integrated social and environmental management system to support the recently achieved ISO 9001 and HACCP certification”.
Thomas Duve, chairman of the AATIF Board of Directors stated – “Mount Meru is the latest AATIF investment in Zambia, growing the fund’s exposure beyond the maize and wheat sector to include a local processor in the edible oil sector. Mount Meru fits well into AATIF’s portfolio by contributing to the fund’s mission in supporting farmers in the production of soya, cotton and sunflower locally, acting as their off-taker, further providing local value addition and finally serving the demand of consumers in local and regional markets. We look forward to growing the relationship with Mount Meru and leveraging the TA facility to increase the impact on the ground.”
AATIF is a public private partnership dedicated to promote the food / agri sector across Africa by providing patient capital and technical assistance. The fund provides debt financing to small, medium and large-scale agribusinesses along the entire agriculture value chain as well as financial institutions active in the sector. Ticket sizes range from USD 3.5m up to USD 30m per project with a possible maximum tenor of 12 years.