Norfund invests in Zambian soya processor
Norfund is investing US$5 million in 260 Brands to finance the company’s expansion into the production of soya milk.
260 Brands is an agro-processing company based in Lusaka, Zambia, that manufactures, markets, and distributes consumer products, mainly based on maize and soya. The company’s key products today are textured soya pieces, powdered beverages, snacks and high energy protein supplements, primarily for the local markets. The company demonstrates value addition in soya bean in various consumer foods products and beverages, besides traditional cooking oil.
“Through providing capital to allow the company to expand into the production of soya milk, Norfund will contribute to create much needed jobs and increased income for smallholder farmers, while increasing access to locally produced nutritious food,” says Andreas Davidsen, vice president and head of agribusiness and manufacturing at Norfund.
The capital from Norfund will finance an investment in a turnkey soya milk production facility to meet estimated potential in the market whilst benefiting from synergies with existing business and established access to soya beans.
260 Brands has developed a network of 2,500 smallholder farmers that supply soya beans.
The Zambian milk alternative market is currently small and consists of imported products, with prices at 30-60% above dairy milk. The company is targeting a price on its soya milk close to dairy milk. Most of the population in the region are lactose intolerant and the company believes soya milk can be an attractive alternative. Providing the soya milk in UHT form allows for a long-shelf life in ambient temperatures, which is also an important factor for sales and distribution in Zambia, where the cold-chain infrastructure does not allow for availability of such beverages country-wide.
The total milk consumption in the country is currently at 20 litres per capita, well below the annual world average of 104. In neighbouring South Africa, the consumption is at 58 litres – in Norway it stands at 82 litres.
“We’re honored to have Norfund on board with us on this new innovative project, which is the first of its kind, in Zambia. They’re a partner who share similar values as us on equitable growth and job creation, alongside positive impact towards climate action,” says Gaurav Vijayvargiya, chief executive officer of 260 Brands.
The funding from Norfund of $5 million will be used to finance the capex and working capital requirement for a new soya milk production facility at the company’s existing premises. The facility will have an annual production capacity of 9.6 million litres of soya milk.
“We believe this investment and project will be a start to transform the plant-based beverage sector in Zambia and region at large and the board is grateful for their support and excited about the journey ahead together,” says Vijayvargiya.