The Pembani Remgro Infrastructure Fund and Global Alternative Asset Manager and the Carlyle Group (NASDAQ: CG) have announced that they will make a strategic minority investment of USD210m in Export Trading Group (ETG), an African agricultural commodities supply chain manager.
Part of the money would be invested in Mbeya rice farms, where the Group would cultivate rice and barley.
This is the first investment by Carlyle’s Sub-Saharan Africa Fund and the Pembani Remgro Infrastructure Fund. Standard Chartered’s Africa Private Equity division (SCPE), the first private equity investor in ETG, is increasing its investment from January 2012.
Marlon Chigwende, Managing Director and Co-Head of the Carlyle Sub-Saharan Africa Fund, said in a statement issued yesterday in Dar es Salaam: “This is a remarkable opportunity to invest in a business with a proven model that is highly scalable, has delivered impressive financial performance and has tremendous development impact on Africa and its economies.
“We look forward to accelerating ETG’s growth, building value for its shareholders and supporting African smallholder farmers,” he said
For his part, Herc van Wyk, CEO of Pembani Remgro Infrastructure Managers, said the group offers a unique combination of strong management and access to both the agriculture supply chain in Africa as well as key markets in China and India.
“We look forward to supporting the expansion of the company’s supply chain footprint and believe that it offers an exciting growth opportunity.”
Founded in 1967, the group owns and manages a vertically-integrated agriculture supply chain with operations in procurement, processing, warehousing, transportation, distribution and merchandising.
ETG has more than 7,000 employees across 30 African countries including Tanzania, where it operates 26 processing plants and 600 warehouses.
It connects African smallholder farmers to consumers around the world by procuring, processing and distributing agricultural commodities including maize, pulses, wheat, rice, cashew nuts, soya, fertiliser, sugar, coffee and tea.
In the fiscal year ending March 31, 2012, ETG procured and distributed nearly 1.4 million metric tons of 25 different commodities. Eighty-percent of the company’s Africa-originated stock was procured from smallholder farmers. Individually, these farmers have no opportunity to integrate into the global economy.
However, the Group consolidates hundreds of thousands of farmers into a supply chain and creates the scale and efficiency necessary to be globally competitive. ETG is committed to the economic and social development of the smallholder farmers and the regions in which they live.
Ketan Patel, Managing Director of ETG, said: “We are excited to partner with The Carlyle Group and PembaniRemgro and extend our relationship with Standard Chartered Private Equity. The new capital will allow us to expand operations across Sub-Saharan Africa, India, China and South-East Asia and create new markets for African smallholder farmers.”
Ronald Tamale, a Director at SCPE, added: “We are delighted to welcome The Carlyle Group and Pembani Remgro into the shareholding of ETG. As both a bank and private-equity investor, Standard Chartered has been supporting the growth and development of ETG for many years.
The introduction of these two new shareholders will accelerate our collective efforts to build a world-class global business.”