Associated Foods Zimbabwe finds international partner

By ZBC Reporter

International private equity firm Spear Capital has completed its investment into the food manufacturing business Associated Foods Zimbabwe Private Limited (AFZ).

AFZ plays a key role in value addition to agricultural goods from local farmers and currently produces a range of popular food items such as jams, peanut butter, snacks, cereals and canned products for the Zimbabwean market.  

In a statement, Spear Capital said their investment into the business will be a part buy-out of existing shareholders, part working capital injection and part capital expenditure as well as investment into systems and equipment to improve the manufacturer’s environmental impact.

“The current food segment revenue in the region is expected to show an annual growth rate (CAGR 2022-2025) of 30%, resulting in a projected market volume for the sector of US$41m by 2025, which showcases the significant demand for AFZ’s products in the market. Investing in the company will increase the working capital to purchase raw materials, upgrade and expand current facilities, and increase capacity utilisation of the business to be a market leader in Zimbabwe,” the investor said. 

“This new investment brings an exciting opportunity for Spear Capital. AFZ is a company that partners with some of the largest food suppliers in Zimbabwe and provides a secure entry into a high growth market in Zimbabwe.” said Nyaradzo Nyimo, principal at Spear Capital.

“Expanding our already successful portfolio of businesses in the food processing market, we are confident that this will bring more opportunity to supply goods to more consumers and take advantage of the lucrative market the region has to offer.”

Simba Nyabadza, AFZ CEO commented, “This transaction with Spear Capital firmly places AFZ on an accelerated growth path, allowing it to further build its presence in Zimbabwe and create a strong footing to expand into the region. In Spear, we have found a well-connected partner, sharing our values, and with in-depth knowledge of the region and bringing additional expertise to the table.”

The company is well aligned with Spear’s ESG priorities, creating sustainable jobs through farmer out-grower schemes to develop the local supply chain where AFZ provides offtake contracts for produce; and through the expansion of production facilities, which boosts economic growth and improves the lives of employees and the local community. 

Adding AFZ to its already successful portfolio in industries such as retail, food & beverage, manufacturing, and healthcare opens up opportunities for Spear Capital further to acquire meaningful stakes in industries and territories offering competitive advantage. 

Spear Capital provides growth capital in fast-moving consumer goods (FMCG), local manufacturing and processing operations, and healthcare for small to medium enterprises (SMEs) as well as partners with leading entrepreneurs across the southern African region. With offices in Cape Town, South Africa, and Harare, Zimbabwe, along with a fundraising office in Oslo, Norway, Spear provides partnerships that leverage strong business ethics and local African knowledge to develop mutually beneficial opportunities with local businesses.