Pearl Capital Partners backs Ugandan snack food company
The Yield Uganda Investment Fund, managed by Pearl Capital Partners, has made an investment in Newman Foods, in a blend of equity and quasi-equity. This marks the fund’s 14th investment into the Ugandan agricultural sector.
Newman Foods is a Kampala-based agro-processing company whose primary business is the production and marketing of branded consumer foods sold through retail stores in the local and the regional market, as well as aggregation and export of fresh fruits and vegetables to the European market.
The company was incorporated in 2013, initially focusing on procuring, packaging, and exporting fresh fruits and vegetables, and later diversified its strategy in 2017 through the introduction of the consumer foods/snacks product category.
Yield Fund’s investment into Newman Foods is fully positioned to support the scaling of the consumer foods/snacks segment which has a clear scaling opportunity, high margins, and income generation. The investment will be used to fund the construction of a new processing facility and the acquisition of a larger modern equipment to improve the production throughput, support the company to improve packaging, branding and increased marketing of Newman products, as well as to augment its supply network for the consumer foods segment.
Along with the Yield Fund’s investment, Newman Foods was successful in obtaining a business development support (BDS) matching grant facility ($157,750) from the European Union, which is managed by the International Fund for Agricultural Development (IFAD). The BDS support will be anchored to enhance the technical aspects of the business with a key focus on implementation of a robust commercial strategy, the inclusion of additional smallholder farmers to its supply chain and strengthening the governance structures to support sustainable strategic growth.
Nasser Segujja, managing director of Newman Foods Ltd said, “Newman Foods is a vibrant growing company with significant growth potential, thanks to its strong brand and market visibility. However, our growth has been stifled by a lack of patient capital to scale our production capacity and implement production efficiencies to unlock the commercial facets. The Yield Fund investment could not have come at a better time, as we now have a great opportunity to implement a sustainable growth strategy in our value addition category. This investment has given the company the confidence to engage many of our smallholder farmers, who are pivotal to our business, and to develop a sustainable integrated supply chain.”
Wanjohi Ndagu, co-managing partner at Pearl Capital Partners said, “This investment in the snacks value chain makes available much needed resources to the sector especially when funding enterprises for growth has been constrained by a slowed down economy owing to the high inflation rate and effects of the Covid-19 pandemic. The investment will go towards construction of a new processing facility and acquisition of larger modern equipment to serve a growing demand for consumer foods in Uganda and East Africa markets.”