Emerging Capital Partners LLC News
Emerging Capital Partners Sells Stake in Moroccan Fertilizer Distribution Company
WASHINGTON, May 5 PRNewswire — Emerging Capital Partners LLC (ECP), an international private equity firm focused on investing across the African continent, today announced the sale of its entire position in Charaf Corporation, Morocco's leading fertilizer distribution company. ECP's exit was made through a sale of shares to the historical shareholders of Charaf for total proceeds of U.S. $23.2 million. The initial investment consisted of common shares and was made through the AIG African Fund Infrastructure Fund L.L.C. (Africa Fund I) in December 2003.
During ECP's holding period, the firm helped Charaf achieve significant growth, with sales increasing an average of 25 percent each year. This enabled Charaf to rapidly expand its market share and become the No. 1 fertilizer distribution company in Morocco. In 2007, Charaf's annual sales were over U.S. $100 million and the volume of fertilizer sold exceeded 262,000 tons.
"ECP helped Charaf expand into products that better matched the regional farmers' needs, such as water soluble fertilizers that are becoming more popular as irrigation techniques improve," said Hurley Doddy, chief operating officer of ECP. "The establishment of a corporate development strategy and improvements to products enabled the company's revenue to grow 116 percent and surpass the former state-owned monopoly over our four-year holding period."
Agriculture is critical to Morocco's economy. The sector employs 40 percent of the country's workforce and accounts for 15 percent of GDP and 40 percent of exports. In the past, fertilizer distribution was entirely state-owned and had little incentive for innovation. However, Morocco has been gradually liberalizing, opening its agricultural markets and systematically eliminating tariffs.
"ECP's investment allowed Charaf to harness the growth in the fertilizer distribution market as the Moroccan government gradually de-regulated the industry," said Vincent Le Guennou, executive Vice President of ECP. "This de-regulation has created opportunities for ECP to source African opportunities that provide attractive returns for private equity investment by challenging the established environment and creating value."
ECP continues to hold stakes in three agribusiness related companies throughout Africa: Notore Chemical Industries in Nigeria; SOMDIAA Group, a sugar producer in central Africa; and Agromed, a dairy company in Tunisia. ECP has also achieved successful exits in agribusiness including: Societe Internationale de Plantations d'Heveas (SIPH), Cosmivoire S.A., Societe Ivoirienne de Productions Animales (Sipra) and Nestle Cote d'Ivoire S.A.
ABOUT ECP
Emerging Capital Partners (ECP) is the first private equity firm to raise more than U.S. $1.2 billion to invest in companies across the African continent. The ECP team has an eight-year track record of pan-African investing through six successful funds. The firm's investment strategy is focused on delivering consistently above-market returns to investors that are uncorrelated to the U.S. and other global economies. For more information, please see www.ecpinvestments.com.
SOURCE Emerging Capital Partners LLC
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