MOZAMBIQUE – Amethis Fund II, Paris-based private equity fund has acquired a minority equity stake in Mozambique’s largest integrated wheat and maize miller, Merec Industries.

In partnership with Proparco and Kibo Fund II, a funding arm of Mauritius based Kibo Capital Partners, Amethis seeks to reinforce Merec’s dominant position in Mozambique and expansion into the region.

The investment will support the miller’s strategy to become an integrated multinational packaged food company with a strong focus on exports within the region and the continent.

The company is looking to launch new categories, build brands, structure local partnerships and make new strategic acquisitions both in Mozambique and in Southern African countries.

Its expansion over the region will also be accompanied by product diversification into new higher value products based on wheat, something that will not only expand its global market share but also strengthen its position locally.

“Merec is a perfect partner for our first investment in Southern Africa.

We believe Amethis is investing at a turning point of Merec’s development.

The group, with our support, aims to become a regional platform of wheat based food products through the expansion of its distribution network at a local level and regionally.

This transformation will also be supported by continuous innovation in order to diversify the product line,” said Jean-Sebastien Bergasse, Partner at Amethis.

Merec plans to reinforce its leadership position in key product categories, expand its value chain and invest in modern industrial bakery for vertical integration in a drive for growth.

“We look forward to leveraging the deep relationships of our new partners in the region and the operational support they bring to achieve our joint vision,” said Mhamud Charania, Chairman of Merec Industries.

An African expansion

Merec, a family owned group has developed a strong footprint in the SADC region after it diversified its portfolio from milling to food FMCG including pasta, biscuit and animal feeds.

Merec investment was the second for Amethis’ new Fund II and the first in Southern Africa even as Amethis plans to gain a foothold in Africa.

Amethis which focuses on investing in debt and equity in Africa, announced it was seeking to raise US$358m for investment in 11 countries on the continent including Kenya.

Merec Industries has before benefited from US$1.19 million funding from the International Finance Corporation (IFC) to expand its wheat mill processing activities in Mozambique.