Ethiopia’s leading poultry company EthioChicken Group receives US$5m backing from Finnfund
ETHIOPIA – Ethiopia’s leading producer of day-old-chicks and poultry feed, EthioChicken Group has received US$5m equity investment from OP Finnfund Global Impact Fund I, the first global emerging markets impact fund in Finland.
Finnfund, a Finnish development financier and impact investor acts as an anchor investor and advisor to the fund.
The financing, which is a follow-on investment from Finnfund’s backing of the company in 2017, is aimed to generate jobs, improve food security and reduce poverty in Ethiopia.
“We are very happy to welcome OP Finnfund Global Impact Fund I into the shareholding of the company.
“Finnfund has been one of our strongest allies and supporters, and we look forward to continuing to work with them and the fund as we scale up operations and continue our quest of making farmers healthier and wealthier through poultry,” said David Ellis, CEO of EthioChicken.
“Improving nutrition and livelihoods in rural Ethiopia fits well to the investment strategy of OP Finnfund Global Impact Fund I.“
Tuomas Virtala – Head of Asset Management at OP Corporate Bank
Established in 2010, EthioChicken has become a forerunner and one of the largest poultry companies in East Africa.
The company currently operates eight poultry farms and four hatcheries, which produce and supply young chicken for households in rural Ethiopia. EthioChicken is also a significant feed producer with its two feed mills.
“Improving nutrition and livelihoods in rural Ethiopia fits well to the investment strategy of OP Finnfund Global Impact Fund I.
“EthioChicken has done remarkable work in developing their business, and we are excited to support the work through this funding,” said Tuomas Virtala, Head of Asset Management at OP Corporate Bank.
EthioChicken is committed to sustainable production and striving to continuously develop its processes and operations.
By producing chicks that produce eggs as well as poultry meat, the company supports families to improve their nutrition and livelihood, particularly in rural areas.
Today, EthioChicken employs directly roughly 1,600 employees of which 587 are women (38%).
In addition, through their network of 8,000 entrepreneurs who nurture, grow and sell the chicks the company employs approximately 16,000–24,000 primarily young Ethiopians.
The young chickens are then sold mostly to local farmers and households. Last year, the company reached about 3 million farmers or households in rural Ethiopia, generating income and improving the nutrition of millions of people.
“EthioChicken is a true success story. Finnfund has been one of the key financiers for several years and actively supporting the development of the company.
“Ethiopia has experienced political unrest in the past years and the markets were impacted by COVID-19, but EthioChicken has done remarkably well. It is also clear that their work for better nutrition and job creation is needed more than ever,” said Jari Matero, Associate Director, Head of Agri and Forestry portfolio.
EthioChicken is one of the few poultry companies in Africa to receive GlobalG.A.P. certification, a global set of standards for sustainable, good agricultural practices.
Prior to receiving the investment, the IFC revealed plans of issuing a US$10 million loan to the poultry company to enable it implement its 5-year program.
Under the company’s growth plan, it seeks to construct two new breeding farms with a capacity of 60K bird each and one new hatchery facility, expected to cost US$16.2 million.
The two new breeding farms will be built in SNNPR region and Amhara region, while the new hatchery will be built in SNNPR region.
