MALI – Forafric, the largest wheat company in Morocco, has acquired a majority stake in Malian cereal processing company Groupe Sahel.

Groupe Sahel, founded in 2011 by entrepreneur Houd Baby, has quickly become a key player in cereal processing in the Sahel region with subsidiaries in Burkina Faso and Niger.

It boasts of having a production capacity of 600 tonnes per day and is famously known for its Lafia brand.

Investment into the company will enable Forafric to expand in West Africa, while strengthening Groupe Sahel’s production capacity and diversifying its product offering.

The deal combines the local expertise of Groupe Sahel with the century-old know-how of the Moroccan milling company.

Forafric, founded in 1926, is a leading agribusiness company in Africa with activities in Morocco, and exports its products to more than 45 countries.

With 12 industrial units and two logistics platforms, Forafric is the largest milling company in Morocco, producing a complete range of flour and semolina, as well as transformed products such as pasta and couscous.

Overseeing the partnership agreement, Enexus Finance, an investment banking firm specialized in middle-market transactions in Africa served as an advisor to Groupe Sahel.

Forafric’s acquisition of stake in the West African country follows its recent partnership with Alapala, one of the leading brands in flour milling equipment and mill projects, to expand three of its existing mills in Morocco as well as building three new mills at a total cost estimated at MAD 1 billion (US$99.5 million).

The investment, includes the purchasing of equipment, and the recruitment of human capital.

“We are pleased to have the opportunity to work with Forafric Maroc on its program to enter a new market and significantly increase its production output… to further develop the milling industry in Morocco,” said Gorkem Alapala, Vice Chairman of the Board of Alapala Group.

The expansion of the Forafic operations in the North African country is forecasted to increase the company’s daily wheat and durum processing capacity to 2,370 metric tonnes over the next 30 months, up from the current daily capacity of 420 metric tonnes.

Commenting on the partnership, Mustapha Jamal Eddine, Forafric Maroc CEO, highlighted that his company has improved its processes, lowered its costs, and increased market penetration throughout the past four years.

“Teaming with Alapala will enable us to significantly increase output and take our business to the next level as well as help us to further lower our cost basis and provides an entry into the dynamic Moroccan market,” he added.

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