AFRICA – Global culinary products manufacturer GBfoods has undertaken a share buy-back at its African unit GBfoods, from private equity investment firm Helios Investment Partners.
Established in 2017, GBfoods Africa was a joint venture created by Helios and GBfoods through the combination of GBfoods’ existing bouillon cubes business in Africa and the acquisition of brands Gino, Pomo, Jago, and Bama.
Under the new deal, Helios has sold its 49% stake in the company to its partner and co-shareholder, after successful execution of its value creation strategy which has resulted in strong financial, social and environmental performance.
Its value creation objectives were focused on four pillars: integration of the various business units under one Africa-oriented organisation; localisation of production, including large-scale farming and industrial processing; product innovation; and investments into route-to-market.
According to the Africa-focused investor, during its ownership, annual operating profit growth was consistently in the mid-teens, driven by both revenue growth and margin expansion.
Nimit Shah, Partner at Helios, commented, “Helios is proud to have been selected as GBfoods’ partner of choice in Africa, and together to have transformed GBFA into a large, fast-growing and locally sustainable African consumer business.
“Our successful investment underscores the strength of our strategy in the consumer non-discretionary sector, focussing on resilient businesses that offer low-cost products with mass market appeal, and our capability to create value for all stakeholders through establishing high ESG standards and achieving growth with positive impact. We look forward to following the Company’s continued success.”
The combined platform is reported to have generated 70% of gross profit from core brands and established a strong presence in over 30 African markets.
The local production initiatives had a particularly significant social and environmental impact, with the investments in West Africa enabling the company to reduce carbon emissions and retain high-value jobs and skills in-country.
To date, the tomato farming and production project in Nigeria has created over 1,000 farming jobs, grew employment of women into new harvesting roles by 80%, and increased farmer output by up to 10x their prior crop yields.
The shift to local production has also reduced GBFA’s carbon footprint. For example, by using locally sourced raw materials for mayonnaise production, the Company has reduced finished product imports from China and the US by c.550 containers per annum.
Further boosting its operations, the company inaugurated a N20 billion (US$51.9m) Tomato processing factory in Kebbi state in June 2020, aimed to help the country achieve self-sufficiency in production of tomatoes and its related products.
The US$51.9m factory was established in partnership with the Central Bank of Nigeria (CBN), Kebbi State Government and the Emirate of Yauri.
The investment was followed with the opening of N5.5 billion (US$14.3m) state of the art production factory for its leading mayonnaise brand, Bama Mayonnaise in Ogun State, Nigeria in August 2020.