Norfund invests 21 Million USD to increase production of consumer goods in Ethiopia

Addis Ababa January 24, 2023 (FBC) – Norfund, the Norwegian Investment Fund for Developing Countries and a consortium of private investors managed by 54 Capital has announced 21 million USD growth capital investment into Ethiopia’s largest Fast-moving consumer goods (FMCG) platform SAMANU.

According to Norfund the investment Increases local production of edible oil, create jobs, increase food security, and provide income for up to 200,000 smallholder farmers.

SAMANU is a platform company with well-established brands operating in Ethiopia’s main FMCG sub-sectors (Tena Edible Oils, 555 and Aura Soap & Detergents, and Chef Luca wheat products) Norfund stated.

Norfund also stated that the investment will fund the construction of a new solvent extraction plant to produce edible oils based on locally sourced sesame, sunflower and soya beans in its refineries.

By reducing the dependency on imported raw materials, the investment aims to create jobs in value-addition and increase Ethiopia’s food security, it added.

Norfund further added that the completion of a vertical integration project will also allow for increased export opportunities within the sectors the company already operates.

Norwegian Investment Fund for Developing Countries indicates that enough volume of locally produced oilseeds for its refineries, the company intends to develop large oilseeds clusters in Ethiopia over the next six years, providing livelihoods for 200,000 smallholder farmers.

The Investment Fund disclosed that in the first six months post investment, the objective of the fund is to identify 642 clusters and sign contracts with around 5-7,000 smallholder farmers.

Norfund, through its Business Support Facility, plans to use grant funding to assist contracted smallholder farmers with inputs like high quality seeds, fertilizers, training and capacity building, as well as agricultural technology to boost productivity.

Andreas Davidsen, Norfund’s VP of Scalable Enterprises – Agribusiness and Manufacturing, said the Investment Fund is ready to partner with SAMANU and support the execution of the joint vertical integration strategy, creating jobs and increasing food security.

He said the Investment Fund strongly believes in the opportunities of local food production in Ethiopia and Norfund looks forward to working closely with the SAMANU management team and 54 Capital to help implement best in class practises and solutions.

Saad Aouad, 54 Capital PE Advisors’ Chief Investment Officer, on his part said the investment demonstrates the robustness of the strategy for further enhancing the value chain within Ethiopia which will undoubtedly benefit from Norfund’s extensive experience across the continent.

By: Yonathan Yoseph