Norfund invests in Zambian soya processor 

20 Sep 2022

Norfund is investing 5 million USD in 260 Brands to finance the company’s expansion into production of soymilk, creating jobs and increasing access to locally-produced nutritious food.   

260 Brands is an agro-processing company based in Lusaka, Zambia, that manufactures, markets, and distributes consumer products, mainly based on maize and soy. The company’s key products today are textured soya pieces, powdered beverages, snacks and high energy protein supplements, primarily for the local markets. The company demonstrates value addition in soybean in various consumer foods products and beverages, besides traditional cooking oil. 

“Through providing capital to allow the company to expand into the production of soymilk, Norfund will contribute to create much needed jobs and increased income for smallholder farmers, while increasing access to locally produced nutritious food”, says Andreas Davidsen, Vice President and head of Agribusiness and Manufacturing at Norfund. 

100 direct jobs and 12,000 new outgrower farmers  

The capital from Norfund will finance an investment in a turnkey soymilk production facility to meet estimated potential in the market whilst benefiting from synergies with existing business and established access to soybeans. 

260 Brands has developed a network of 2,500 small holder farmers that supply soybeans, while receiving support for investing in its small holder farmers as long-term partners by providing agronomic training, inputs on credit and purchase of the farmer’s commodity conveniently at his or her doorstep – all helping to contribute to a profitable farming enterprise for a local, small holder farmer.  

“We expect the investment to create 100 new direct permanent jobs, and an increase of local farmers that receive increased income through supplying the company of more than 12,000 small holder farmers”, says Davidsen.

Increasing access to locally-produced milk 

The Zambian milk alternative market is currently small and consists of imported products, with prices at 30-60% above dairy milk. The company is targeting a price on their soy milk close to dairy milk. Most of the population in the region are lactose intolerant and the company believes soymilk can be an attractive alternative. Providing the soymilk in UHT form allows for a long-shelf life in ambient temperatures, which is also an important factor for sales and distribution in Zambia, where the cold-chain infrastructure does not allow for availability of such beverages country-wide.  

The total milk consumption in the country is currently at 20 liters per capita, well below the annual world average of 104. In neighboring South Africa, the consumption is at 58 liters – in Norway it stands at 82 liters1

Norfund aims to support programs to improve productivity and infrastructure for the smallholders. There are also plans to assist the company in strengthening ESG and management systems, and to improve corporate governance.  

“We’re honored to have Norfund on board with us on this new innovative project, which is the first of its kind, in Zambia. They’re a partner who share similar values as us on equitable growth and job creation, alongside positive impact towards climate action”, says Gaurav Vijayvargiya, Chief Executive Officer, 260 Brands. 

The funding from Norfund of 5 million USD will be used to finance the CapEx and working capital requirement for a new soymilk production facility at the company’s existing premises. The facility will have an annual production capacity of 9.6 million liters of soymilk. 

“The company sees opportunities to expand further as the market grows, and we believe there is a potential for further co-operation in contributing with capital and competence to develop the company in the years to come”, says Davidsen. 

Investing in the agribusiness value chain 

Norfund’s goal is to create jobs and improve lives by investing in companies that promote sustainable development. The agriculture sector is a key part of the fund’s strategy, and it sees great opportunities in investing in companies higher up in the agricultural value chain. 

“We see that we can make a significant difference by investing in companies that provide small scale farmers long-term agreements with the possibility to sell their products at a decent price”, says Davidsen. 

“We believe this investment and project will be a start to transform the plant-based beverage sector in Zambia and region at large and The Board is grateful for their support and excited about the journey ahead together”; says Gaurav Vijayvargiya, Chief Executive Officer, 260 Brands”, says Vijayvargiya.

1 2020: Opplysningskontoret for Meieriprodukter (Melk.no) 

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