Spear Capital backs Zimbabwean food manufacturer AFZ to boost operations

ZIMBABWE – Associated Foods Zimbabwe (AFZ), a Zimbabwean food processing company, has received an undisclosed amount of equity investment from Spear Capital to bolster its operations.

AFZ plays a key role in value adding agricultural goods from local farmers and currently produces a range of popular food items such as jams, peanut butter, snacks, cereals and canned products for the Zimbabwean market.

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Following the investment, channelled towards working capital and capital expenditure, the FMCG focused investor has joined AFZ as one of its shareholders.

Its main focus will be to upgrade its systems and equipment, and expand its facilities to improve the manufacturer’s environmental impact and increase capacity utilisation of the business.

Also, AFZ will channel the funds towards purchase of raw materials to meet growing demand of products, with aim to be a market leader in Zimbabwe.

The current food segment revenue in the region is expected to show an annual growth rate (CAGR 2022-2025) of 30%, resulting in a projected market volume for the sector of US$41m by 2025, which showcases the significant demand for AFZ’s products in the market.  

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AFZ is well aligned with Spear’s ESG priorities by creating sustainable jobs through farmer out-grower schemes where the company sources its raw material from.

“This transaction with Spear Capital firmly places AFZ on an accelerated growth path, allowing it to further build its presence in Zimbabwe and create a strong footing to expand into the region.

“In Spear we have found a well-connected partner, sharing our values, and with in-depth knowledge of the region and bringing additional expertise to the table,” said AFZ CEO, Simba Nyabadza says;

Adding AFZ to its already successful portfolio in industries such as retail, food & beverage, manufacturing and healthcare, opens up opportunities for Spear Capital to acquire meaningful stakes in industries and territories offering competitive advantage.

“AFZ is a company that partners with some of the largest food suppliers in Zimbabwe and provides a secure entry into a high growth market in Zimbabwe.

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“Expanding our already successful portfolio of businesses in the food processing market, we are confident that this will bring more opportunity to supply goods to more consumers and take advantage of the lucrative market the region has to offer,” says Nyaradzo Nyimo, Principal at Spear Capital.

Recently, the investor dished out additional support to Southern African plastic manufacturer Arkay Plastics.

Spear invested in Arkay Zambia and Mozambique’s operations in 2020, and despite the persistence of a COVID-19-related global economic downturn and the negative impact of geopolitics on the business environment, it has increased its investment value by 48%.

The recent deal will enable Arkay to become a leading player with cross-region market dominance in Africa’s manufacturing sector, pertinent to the growth potential of fast-moving consumer goods (FMCG) companies in Southern Africa.

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