Agribusiness Sector Targeted by Fanisi with Investment in ProDev

GroupA second regional investment for Fanisi

Prodev Group Holding

Confirming an investment in one of its key targets sectors of agribusiness, and a second investment in Rwanda, Fanisi Capital has today announced its investment in ProDev Group Holdings ─ a company engaged in value creation businesses along the maize supply chain. ProDev has two subsidiary companies.

One, Minimex Ltd., is the largest manufacturer of branded maize meal in Rwanda, a manufacturer of grits, for the brewing industry, and bran, used in the formulation of animal feed. The other, ProDev Rwanda, is involved in the handling, drying and storage of maize.

The partnership with Fanisi will provide the impetus required to continuously improve the maize value chain, which is expected to make a positive contribution to Rwanda’s agriculture, the health of the population, and its economic development.

ProDev Group Holdings is changing the nature of the maize value chain in Rwanda, from maize grain production, to post harvest processing, up to introducing more nutritious value-added products to the population. Together with their partner Bralirwa, the subsidiary company, Minimex, is improving maize productivity through mechanization and irrigation at its farm in Kayonza. Subsidiary company ProDev Rwanda, with its drying and storage facilities in Rwamagana, has proved to be the preferred buyer of local Rwandan maize cultivated in the East of Rwanda. With the new investment by Fanisi, ProDev Rwanda plans to increase its storage capacity progressively from the current 2,000 tons to 10,000 tons. Minimex is currently in the process of introducing fortified maize meal to the market, in collaboration with its partner – the World Food Program – in line with the Rwandan Government’s (Ministries of Health and Education) program to eradicate malnutrition among vulnerable groups of the population, more specifically those of school going age.

Minimex is also providing Bralirwa with premium grits for its local beer production, in line with Heineken’s objective to source its raw materials locally. Import substitution by using locally sourced ingredients has a positive impact on Rwanda’s balance of payments. Plans are underway to establish an animal feed plant over the next 12-months, which will enrich and add value to bran – another maize production by-product – that has traditionally been sold as-is to farmers in Rwanda and to animal feed plants in Kenya.  With this investment of US$3 million (KShs255 million), Fanisi recognizes the strong commercial growth and development impact opportunities for the ProDev Group Holdings in Rwanda and the East Africa region. Between December 2011 and December 2012 Minimex’s capacity utilization increased from 22% to 43%. With Fanisi’s investment, capacity utilization is expected to increase to an even higher level of 60% by the end of 2013.

With a significant minority shareholding plus active participation at Board level, Fanisi’s involvement will provide access to global expertise on supply chain management as well as enhance ProDev’s purchasing power; making a significant impact at a time when ProDev Group Holdings is poised to expand operations and enter new market segments.

Speaking at a press conference to announce the investment in Kigali, ProDev’s Chairman Félicien Mutalikanwa outlined the progress the company has made since it was set up in 2006. The last 16 months were highlighted as having been favorable for ProDev as the company has expanded its reach, strengthened its business and captured the attention of Fanisi in the process. In January 2012, an earlier investment had been made by Claude Mansell, a British national, when he joined as General Manager of Minimex.

Commenting on the investment, Tony Wainaina, Managing Partner of Fanisi Capital, explained that the funding, achieved through a combination of equity and debt, will also pave the way the for scaling of ProDev’s business across Rwanda and the region, as well as initiate a programme for the fortification of its branded maize meal to create a more nutritious product. Both regional growth and development impact are core mandates of Fanisi Capital.

Wainaina also noted that with this second investment in Rwanda in only five months – Fanisi invested in a leading Rwandan pharmaceutical wholesaler Sophar in December 2012 – Fanisi has become the leading private equity investor in Rwanda since 2012. Fanisi is also exploring investment opportunities in the financial services sector; the oil, gas and mining services sector; and in the healthcare sector across the region.

Fanisi Venture Capital Fund is a USD50 million venture capital fund that makes investments― of between USD1-3 million on average ― into small and medium enterprises in East Africa that have the ability to scale up innovative business models across the Region and beyond. Fanisi provides appropriately structured capital and management support to its portfolio companies, to help them build on their competitive advantage to achieve their growth and sustainability objectives.

Fanisi’s investors include Norfund (Norwegian Investment Fund for Developing Countries), the World Bank Group’s IFC, Proparco, Finnfund, Sarona Capital and Lundin for Africa Foundation.

Coupled with the Fund is a USD2 million business advisory services foundation that works with portfolio companies to help them address capacity gaps in management, environmental standards, health and safety requirements and governance requirements that currently constrain their performance or growth.

THANK YOU

Prodev Group Holding