At the start of the year, we wrote an article about Westfalia Fruit International’s plans to embark on a growth strategy that would include acquisitions and entry into new markets. To support the company in executing this strategy, a well-known development finance institution was considering investing $100mn as part of a broader $300mn facility being led by a bank to finance this growth.
Of interest to us was the South African company’s plans to grow its office in Kenya and develop a ripening facility in the country. In China, it had plans to bolster marketing and expand ripening and storage facilities.
The deal recently completed, and in the company’s announcement one statistic stood out for us—the size of the market and its growth potential, which we shall explore in further detail once we discuss the second deal.
Related article: IFC, HSBC, Standard Bank invest $300mn in Westfalia
Westfalia Fruit’s announcement was swiftly followed by another. This time from Mission Produce, one of the world’s largest avocado producers, which acquired a minority stake in Selokwe Agri as part of plans to establish vertical integration in South Africa, as it adds the country to a list that already includes Peru, Colombia and Guatemala.
To do this, the company entered into a joint venture with private equity firm Criterion Africa Partners and ZZ2 Brodery to grow over 1,000 hectares of avocado. ZZ2 Brodery is one of the country’s largest farming companies and it currently develops more than 250 hectares of avocados at Selokwe.