South African fast-moving consumer goods (FMCG) company, Tiger Brands, today announced new investments in Ethiopia and Nigeria.[hidepost=9][/hidepost]
Tiger Brands has signed an agreement with the East African Group of Companies of Ethiopia relating to the formation of a new food and home & personal care (HPC) joint venture which will operate in the Ethiopian market.
“Ethiopia, which has a population of approximately 85 million, has experienced high GDP growth rates for a number of years. Most categories in the packaged consumer goods sector are enjoying good growth, stimulated by the fast growing economy,” the company said in a statement.
The principal activities of the joint venture will comprise the manufacture and marketing of various HPC products, biscuits, flour and pasta, categories that currently form part of the East African Group’s existing operations.
The East African Group is the largest manufacturer of detergents in Ethiopia and this business will also form part of the joint venture.
The shareholding in the new company will be held as to 51% by Tiger Brands and the balance of 49% by East African Group (Eth) Plc and its associate companies.
The second agreement relates to the purchase of the entire issued share capital of Deli Foods Nigeria Limited, a company engaged in the manufacturing and marketing of biscuits for the Nigerian market.
“With its large population and a strong and growing consumer market, Nigeria offers excellent growth opportunities for FMCG companies. The Deli Foods acquisition is therefore seen as a first step in entering this important market,” the company said.
Tiger Brands expects the acquisitions to generate a combined annualised turnover of approximately R500 million (US$70.5 million) in the first year.
In addition, an agreement in principle has been reached between UAC of Nigeria Plc (UAC) and Tiger Brands in terms of which Tiger Brands would acquire a 49% interest in the Nigerian food and beverage interests of UAC. The acquisition specifically excludes the franchised quick service restaurants of UAC.
UAC holds food interests primarily in the branded savoury, snacks, dairy and beverage categories.