HomeBusiness DigestAssociated foods unveils US$2 million funding

Associated foods unveils US$2 million funding

Food processing firm Associated Foods Zimbabwe Ltd (AFZ) has acquired a modern peanut butter production line that is seen improving the company’s competitiveness, management has said.

By Taurai Mangudhla

The plant, situated in Vumba, was part financed by a US$2 million investment fund from the Norwegian Investment Fund for Developing Countries (Norfund). In addition to part-financing the merger and acquisition of the new state-of-the-art peanut butter production line, Norfund’s investment will contribute towards capital expenditure and working capital.

AFZ- which manufactures peanut butter, jam spreads, as well as canned tomatoes and fruits, and nut savouries-was established in January 2016.

Born out of a merger between Honeywood Enterprises (Pvt) Ltd, Zimbabwe’s leading producer of jams, mainly under the “Farm Gold” brand, and Spread Valley (Pvt) Ltd, one of the country’s leading producers of peanut butter, under the “Mama’s” brand.

Simba Nyabadza, AFZ director and majority shareholder, said the new production line will result in improved capacity at the company’s Vumba factory.

“By combining the manufacturing strengths of Honeywood Enterprises with the sales, marketing and distribution strengths of Spread Valley, we aim to create the economies of scale and synergies in order to generate significant added value and efficiencies for all stakeholders, including customers,” said Nyabadza.

Apart from increasing capacity, the new production line will also help in improving the quality of the company’s products to world class standards.

“We are pleased to have found in Norfund a first-class partner with a deep understanding of the food and agribusiness sector, strong track-record and a well-rounded international network.” Nyabadza said.

In releasing the US$2 million to AFZ, Norfund said the investment will also contribute to supporting the local food processing sector in Zimbabwe by replacing imports with local produce.

“This investment is in line with Norfund’s strategy to support profitable and sustainable, local enterprises in developing countries. Agriculture is a priority sector for Norfund, as it employs approximately half of Africa’s workforce and plays an important role for economic growth and development. We look forward to being an active, strategic minority investor in AFZ with a long term perspective,” Chishamiso Mawoyo, an Investment Manager in Norfund’s Food and Agribusiness department, said.

Norfund’s support to Zimbabwean business comes at a time local companies are downscaling or shutting down mainly due to lack of funding.

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