The Dutch development bank FMO and DEG – Deutsche Investitions- und Entwicklungsgesellschaft have provided a term debt package of in total ZAR 250mln to Beefmaster Holdings (Pty) Ltd. (“Beefmaster”) in South Africa. The package comprises of senior loan and mezzanine facilities under the Friendship Facility agreement, which DEG arranged on behalf of the DEG/FMO Joint Office in Johannesburg. DEG’s and FMO’s financing is part of a larger funding package comprising term debt, fresh equity and working capital facilities. The primary objective of the capital and funding raise is to increase capacity utilisation of Beefmaster’s operations. The proceeds will be used to increase cattle numbers in the feedlot, for capital expenditure related to utilization increase in the abattoir, and to restructure existing debt to bring the company’s debt in line with long term requirements.
Beefmaster is one of the largest privately-owned meat production companies in South Africa. The company had humble beginnings when the founder of Beefmaster started a small feedlot with eleven cattle in the 1960’s. The feedlot grew from strength to strength and Beefmaster was officially incorporated in 1986. Today, Beefmaster is one of South Africa’s most complete vertically integrated producers of beef and beef-related products. It is involved in every aspect of the beef supply chain, ranging from feed production, feedlotting, and slaughtering to distribution through local and international wholesale and retail channels. The company remains a family-owned business and the founding family is still involved in the daily operations.
Animal production contributes approximately 41% to the country’s agricultural GDP. About 500,000 people are being employed by the industry and 2.1m people are dependent on the livestock industry for their livelihood. Through supporting an industry vital to the South African economy, DEG and FMO will contribute to the further development of South Africa in general, and the red meat industry in particular. The company’s expansion plans are expected to lead to an increase of 411 jobs, with most of those jobs being in the Northern Cape Province. This is one of South Africa’s least developed provinces with official unemployment close to 30%. Lastly, the DEG and FMO financing package will catalyse financing from a commercial bank as well as facilitate the entry of a new equity partner.
Suzanne Gaboury, FMO Director for Agribusiness said, “FMO’s partnership with Beefmaster will help in the expansion of a South African company, improve food production and contribute to food security in the region. The new investment should create employment opportunities, provide affordable food to consumers, and also benefit Beefmaster’s employees, local suppliers and distributors. FMO’s investment in Beefmaster reflects the organization’s commitment towards supporting viable local companies that will help develop Africa’s agribusiness value chain.”
“Africa - particularly Sub-Saharan Africa - is one of DEG’s strategic focuses as is finance of medium size enterprises like Beefmaster. We are therefore pleased to support an important South African food producer and enable the company to continue its expansion path, thus contributing to the economic development in one of South Africa’s least developed regions”, said Franziska Hollmann, DEG Director Corporates Africa & Latin America,
About FMO
FMO is the Dutch development bank. FMO has invested in the private sector in developing countries and emerging markets for more than 45 years. Our mission is to empower entrepreneurs to build a better world. We invest in sectors where we believe our contribution can have the highest long-term impact: financial institutions, energy and agribusiness. Alongside partners, we invest in the infrastructure, manufacturing and services sectors. With an investment portfolio of EUR 8 billion spanning over 85 countries, FMO is one of the larger bilateral private sector development banks globally. www.fmo.nl
Press Contact:
Paul Hartogsveld
+ 31 (0) 70 314 99 28
About DEG
DEG, a subsidiary of KfW, finances investments of private companies in developing and emerging market. As one of Europe’s largest development finance institutions with a portfolio of EUR 7.8, billion. DEG promotes private business structures to contribute to sustainable economic development and improved living conditions. www.deginvest.de
Press Contact:
Barbara Schrahe-Timera
+ 49 (0) 221 4986 1855
