By Ben on May 8, 2012
VC4Africa is pleased to announce that ALTVEST Africa has invested In Yambeeji Honey & Rice Products in Zambia. As a peer-to-peer network many matches are made via the VC4Africa platform, however, this is the first deal to be closed via the VC4Africa Booster program. This is a program that supports a select number of VC4Africa listed ventures and helps prepare them for investment. From the 5 participants, four are in discussions with investors and Yambeeji is the first to secure funding.
In line with Alternative Investments Africa (ALTVEST) long term strategy, ALTVEST has acquired a majority stake in YamBEEji Honey & Rice Products Private Limited Zambia (YamBEEji). As seen in the picture tweeted by ALTVEST, the agreement was signed on 1st of May 2012 in Lusaka by Tichaona Seremani (CEO of ALTVEST) and Chibbonta Chilala (CEO of YamBEEji). Saskia Reus-Makkink, head of investor relations at VC4Africa, explains, ‘We are very happy that we could support Chibbonta in realizing his dreams. He was already running his farm for several years and was looking for expansion capital. With this investment he can now integrate 5.000 farmers and 30.000 hectares of farmland and become major rice producer in Zambia. The investor has a network of distributors as well, so it is not only about scaling up production but also increased access to market.’ VC4Africa also had a chance to catch up with Stefano Benedikter, Founding Partner at ALTVEST Africa, to discuss this collaboration in more detail.
Can you tell us about Altvest and what makes your organization unique?
“ALTVEST Africa is an investment fund focused on African agriculture. We make it our business to contribute to the development of African small-holder agriculture. Our aim is to combine sustainable returns for our investors with a long-term positive impact on society. We strive to support African small-holder farmers by providing financial support, technical know-how, market expertise and market access in collaboration with local producers and international buyers. Our mutual benefit approach delivers excellent performance to our investors and contributes sustainably to poverty eradication and food security in sub-Saharan Africa.”
What is your interest in Zambia? What other countries and types of ventures do you look to support?
“Together with Zimbabwe, Zambia constitutes the core of our target investments. Not only does our team have extensive expertise on the ground, but we believe the region has the highest potential for growth and impact over the coming decade. Other countries that we target include: Malawi, Mozambique and Tanzania. We will consider ventures from across the region if we see a strong strategic fit.”
What are the qualities or the elements you look for in ventures?
“ALTVEST looks for scalability. No opportunity is too small if it can be scaled quickly, efficiently and sustainably. We identify targets with very strong fundamentals such as small-holder base, visionary entrepreneur, strong market dynamics, etc, that we can then compliment. What we bring to the table is a window of opportunity for growth and an international perspective that can make a local raw gem into a regional star.”
What about the venture YamBEEji Rice & Honey makes it interesting for your organization to support?
“From the day we started our conversation with YamBEEji we were convinced we would do it. There is an incredible fit between the local assets, especially human capital, at YamBEEji and the platform that ALTVEST has brought to the table. Chibbonta is a visionary with very strong management skills. Through ALTVEST he will be able to take the organisation to the next level, become a centre of gravitas for rice producers in the region, and potentially start playing an international role very soon.”
How does your organization look to support YamBEEji Rice&Honey?
“Financing is the most obvious and apparent contribution; sound financial management, operational synergies, market access, branding and international channels are the most important contribution that ALTVEST is making. We aim to be very active in all our portfolio companies; we understand that execution is key and announcing an investment is just the initial whistle that kicks-off the game. ALTVEST and its team are set to contribute majorly in the development of YamBEEji.”
VC4Africa had a small part to play, but could you highlight this role for the community?
“The opportunity came through the VC4Africa channel. The venture was screened and YamBEEji received coaching and support in the development of their documentation. The quality of the venture was clear for ALTVEST, the most active institution for small-holder farmers in the region. Perhaps YamBEEji and ALTVEST would not have met yet if it was not for VC4Africa.”
What would you like to say, if anything, about VC4Africa as a community and what we can do to foster more relationships/connections in the space?
“Deal sourcing is key for us and VC4Africa provides a platform that reaches the largest possible audience. The team sources good quality deals and the VC4Africa platform effectively screens the ones that are investment ready. ALTVEST Africa looks forward to building a direct channel that builds on this fit.”
Do you have a final message?
“ALTVEST Africa looks forward to becoming the most active Agriculture investment fund on the VC4Africa platform and beyond. There is a lot of potential synergies that can be built in the imminent future and the quick turnaround at YamBEEji has shown this potential. Ultimately, we strive to work with as many small-holder farmers as possible. We aim to realize their potential, impact livelihoods and communities while providing a sustainable return for our investors.”
Going forward YamBEEji´s new strategy will significantly increase farmer-level productivity and therefore production processing plant through-put. The company has an enormous reputation with consumers because of the aroma and flavour of its rice. This new venture seeks to strengthen the out-grower base through-out the north-western province and meet the previously unmet demand for rice within Zambia and other SADC countries. ALTVEST will materially invest in YamBEEji, through fresh equity capital, working capital financing, machinery for further mechanisation and management support. With this investment, YamBEEji can now integrate 5,000 farmers and manage 30,000 hectares of farmland to become the centre of gravity for rice production in Zambia. Stable political conditions, a flourishing Zambian economy and rising demand for rice provide a great potential for YamBEEJi, ALTVEST and small-holder farmers’ futures.