Alliance Ginneries Limited invests US$11m in construction of soybean oil processing plant in Zambia

ZAMBIA – Alliance Ginneries Limited (AGL), a cotton ginning company operating in Southern Africa is seeking to diversify its operation by venturing into soybean oil extraction and refining.

The company has commenced construction work for its new processing plant in Lusaka, Zambia to cost US$11m.

The invested amount was raised by the company through impact investment.

This was revealed by Prospero Zambia, a UKaid-funded private sector development entity, who supported Alliance Ginneries to close the deal.

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“Prospero is happy to have supported Alliance Ginneries with investment readiness technical assistance to close the deal,” indicated Prospero in a LinkedIn post.

 According to Prospero, the investment is aimed to reduce imports and increasing income opportunities for 50,000 farmers.

AGL joins a sector with presence of several soybean crushing companies, with World Grain report highlighting that after South Africa, where soybean production has taken off, Zambia has the most soybean crushing capacity of any country in sub-Saharan Africa.

“Prospero is happy to have supported Alliance Ginneries with investment readiness technical assistance to close the deal.”

Prospero

Global Industries Limited is one of the country’s largest oilseed crusher who invested US$20 million in a soya bean processing plant in 2018 to double edible oil production capacity to 1,000 tonnes a day.

The latest financing into the state-of-the-art soya bean processing machinery is an addition to the US$14 million investment made in 2016.

Also, it follows another investment that was made in July 2017, when the Global Group of Companies commissioned a US$60 million edible oil soya bean crushing processing plant in Ndola to enable its soya meal product to penetrate the export market.

Despite the accrued investments to boost local capacity, illegal imports of cheap palm oil from southeast Asia in addition to limited production has squeezed soybean crushers’ profitability.

In late 2018, World Grain reports that Cargill shuttered and began mothballing its 500-tonne-per-day capacity crushing and vegetable oil refining plant in Lusaka, which it had acquired in 2015 from Zambeef and upgraded.

Zambia’s soybean production peaked at 351,000 tonnes in 2017 and dropped to 321,000 tonnes in 2018, as indicated in an USDA report.

AGL has three main operations located in Tanzania, Zambia and Zimbabwe.

The company carries out its activities in partnership with COMPAQI, a jointly funded scheme between DEG, GIZ and Bill and Melinda Gates Foundation, to improve the lives of our farmers and to uplift them from poverty.

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