ETHIOPIA – The Norwegian Investment Fund for Developing Countries (Norfund) has announced an investment of US$7.4 million in Verde Beef Processing PLC, an Ethiopian beef producer.
Verde Beef Processing PLC (VBP), located in Adami Tulu district of the Oromia regional state, Ziway Ethiopia, is an integrated beef producer that undertakes feed production and feed lotting activities.
The company produces premium beef and aims to become the largest cattle processing operation in Eastern Africa with a target output of more than 130,000 carcasses per year.
The capital provided by Norfund will help VBP become the largest cattle processing operation in Eastern Africa by enabling the construction of a state of the art abattoir and meat processing facility – currently underway – and also fund working capital for the business.
Norfund will work alongside 8 Miles – a UK based pan-African private equity fund – which made an initial investment into VBP in November 2015.
8 Miles is chaired by leading Irish rock star Sir Bob Geldof. The fund focuses its investments in the continent of Africa.
It’s investments in Africa include Beloxxi Biscuits in Nigeria, Awash Wine in Ethiopia, and Biyinzika Poultry in Uganda.
According to Norfund, VBP has a significant cost advantage over its international competition, and is expanding its feedlot operation in Ethiopia to capitalize on this; producing high-quality beef for export and local markets.
“This is our first direct investment in Ethiopia, and Norfund is delighted to contribute to Ethiopia’s growth and export through Verde Beef.
This investment is focused on employment creation and export and fits very well with our strategy to contribute to sustainable enterprises and economic development in Africa,” said Managing Director of Norfund Kjell Roland.
“Ethiopia’s geographical positioning combined with its livestock population, the largest in Africa and the fifth largest in the world, position the country perfectly as a potential provider of meat to the rapidly expanding markets of the Middle East and Northern Africa (MENA),” the company says in a statement.
With the investment, VBP plans to generate US$18 million of revenues in 2018 and reach an export value of US$100 million annually by 2021, further developing the important meat sector in Ethiopia and increasing employment to over 2,000 employees.
The company also contributes to the local economy by buying animals from surrounding communities for fattening and slaughter.
“Verde Beef is a critical project that is aligned with the Ethiopian government’s focus on job creation, increasing exports and introducing improvements to the agricultural sector,” Scott Friesen, Chairman and Co-founder of Verde Beef Processing PLC said at the signing of the deal.
Verde Beef Processing was established in 2014 by Verdant Frontiers and is now the largest feedlot and beef export business in Ethiopia.
Verde Beef Processing is situated on a feedlot and crop-farming facility in Adami Tulu, Oromia, south of Addis Ababa.
It uses its 1,300-hectare feedlot facilities to feed and fatten cattle and exports their premium quality Ethiopian beef to the Middle East.