Private equity firm Pearl Capital Partners and Voxtra, an impact investor, have jointly invested $4 million in Biyinzika Enterprises Ltd, a Uganda-based poultry feeds processor.
The money was invested through the two firms’ respective funds, the African Agricultural Capital Fund and the Voxtra East Africa Agribusiness Fund,
Biyinzika Enterprises said that they will use the funds to build storage facilities.
“Poultry farmers across Uganda are held back by the lack of high-quality feed at affordable prices. When maize prices rise ahead of harvest seasons, poultry farmers suffer both in terms of prices and quality. Our investment in storage and a state-of-the-art feed mill will bring much needed stability to the industry,” said Samuel Muwanguzi Mukasa, founder of Biyinzika Enterprises Ltd.
The firm also produces about 250,000 broiler chicks and 90,000 layer chicks per week, as well as edible oils and animal feeds.
In a statement, Pearl Capital Partners said that there is growing demand for chicken and eggs and a huge market to be filled. “While data is scarce, the Food and Agriculture Organisation places Uganda significantly below the continent’s average of 6 kg per capita per year,” said Pearl Capital Partners.
Pearl Capital Partners first invested in Biyinzika Enterprises Ltd in 2006. Other investments in Uganda include Bee Natural, a honey processor; and seed companies Naesco and Farm Inputs Care Centre.
Pearl Capital Partners has been active in the region, having invested $600,000 in Freshco Kenya Ltd, a seed distributer in June 2013 through a quasi-equity loan.
In January, it invested $2.35 million in Midlands Ltd, a Nyandarua County based food processing firm. The $2.35 million capital injection was to finance expansion.
Private equity firms and other large financiers have been investing in the agricultural sector, which is becoming more attractive as farmers move towards mechanisation and value addition.
The International Finance Corporation proposes to invest $6.5 million in Pearl Dairy, a Ugandan-based dairy, through a loan.
In Ethiopia, Pearl has invested $1 million to acquire a 45 per cent interest in Alemayehu Makonnen Farm Plc, a commercial seed business located in the Oromia Region, with farms in the south east of the country. The business grows and markets hybrid maize and wheat seed.