Proparco co-invests in Ethiopian FMCG Platform

08 Jun 2020

This operation is Proparco's first mezzanine transaction in Ethiopia and will support job creation, the development of local agribusiness, import substitution and economic growth in the country.

Proparco and Ethos Mezzanine Partners have announced a US$22m investment into Turaco, a holding company managed by 54 Capital PE Advisors, which holds a portfolio of FMCG assets in Ethiopia. The business manufactures and sells edible sunflower and soya oil under the brand name Tena, as well as soaps and detergents and personal care products, including laundry soaps and perfumed toilet soaps, under the brand names 555 and Aura.

The growth capital raised from Ethos and Proparco will fund the expansion of Turaco’s manufacturing operations in Ethiopia, carried on by Health Care Food Manufacturers SC and ZAK Ethiopia Manufacturing & Trading Plc. Some of the capital will be applied to upgrading these facilities to meet IFC performance standards relating to Environmental, Health, Safety, and Governance.
    
Turaco has embarked on a bold expansion strategy, materially increasing the capacity and effectiveness of its subsidiaries’ production facilities in Ethiopia, as well as expanding its range of product offerings, to meet the growing demand for its market-leading brands in Ethiopia.

The deal was structured and arranged by African Alpha Investment Partners.

54 Capital PE Advisors’ Chief Investment Officer and Chairman of the Board of Turaco, Saad Aouad commented: “We are extremely proud of how our companies have matured to become manufacturers of the leading brands in Ethiopia in their respective sectors, as well as the tremendous growth rates that have been achieved so far. But there is still so much more we plan to do. We are looking forward to having institutional investors like Ethos and Proparco as partners in this next chapter of expanding our facilities, and we are also excited to have access to their resources and considerable experience to help us create world-class companies that can be Proud to be Ethiopian, upholding the standards of global best practice.  It is our vision to improve the lives and livelihood of the communities we serve, by providing world-class products and services for current and future generations, and we look forward to delivering that vision with our new financing partners".

Phillip Myburgh, Managing Partner at Ethos Mezzanine Partners said: “We are very excited to invest in Turaco’s Ethiopian FMCG manufacturing business. The growth prospects for the business, and the chance to invest in this management team, alongside 54 Capital and Proparco, offers us a unique opportunity to support economic growth, development and job creation in the Ethiopian private sector.

Geoffrey Coombs, Senior Investment Officer at Proparco said: “Proparco is delighted to make this investment into Turaco, our first mezzanine transaction in Ethiopia. Investing in the development of emerging states such as Ethiopia is a key strategic priority for Proparco, and we are proud to support Turaco in its expansion. Turaco’s ambitious growth strategy will support job creation, the development of local agribusiness, import substitution and economic growth in the country.

Brad Koen, Co-founder and Director of African Alpha Investment Partners, and board member of Turaco commented:  "We are excited to see 54 Capital and its portfolio of Ethiopian companies, now receiving the support it deserves from large leading institutional investors such as Ethos Mezzanine Partners and Proparco. It will undoubtedly help to propel Turaco on to even greater heights.  We applaud Ethos and Proparco for completing the transaction during a time that will likely be characterized as one of the worst global health crises in recent memory. And we salute the management of Turaco’s operations in Ethiopia for establishing market-leading manufacturing infrastructure, business processes and systems that have delivered quality and affordable locally manufactured products to Ethiopians throughout the COVID-19 crisis."

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