Spear Capital invests in plastics manufacturer
International private equity firm Spear Capital has announced its investment in Arkay Plastics Zambia Ltd and Arkay Mozambique Lda, collectively known as Arkay Plastics. The deal will equip Arkay Plastics with the means of becoming a leading player with market dominance in the manufacturing sector. This latest transaction by Spear Capital demonstrates growing confidence in developing FMCG companies in southern Africa, despite the persistence of the Covid-19-related global economic downturn.
Following the transaction, Spear Capital partner Shaw Mabuto said, “Arkay proved to be a natural investment for Spear Capital, owing to the company’s proven business model and expansion strategy in Zambia and Mozambique. Spear’s investment will bolster further expansion exploration and sales through the development of Arkay’s export markets, while implementing sound corporate governance structures – a vital component for manufacturers within Arkay’s market. Our intention is to boost production efficiencies through economies of scale while concurrently increasing margins.”
Arkay Plastics is regarded as the leading brand name for plastic houseware, furniture, industrial products and packaging in Zambia and Mozambique, with distinct segments in retail, exports, packaging, and crates. The manufacturer also carries approved supplier status with international organisations such as Carlsberg, Castel, Coca-Cola, Heineken, Plascon and AB InBev. Spear’s drive to increase Arkay Plastics’ production capacity will enable the company to fulfil larger orders while growing the higher-margin crate business. In addition, Arkay will prioritise the company’s sustainable manufacturing growth through environmental impact and waste reduction.
Ketan Kotecha of Arkay said, “We greatly welcome the capital injection and establishing a partnership between Arkay Plastics and Spear Capital. Spear’s management team will assist in overcoming Arkay’s working capital constraints while hastening its sustainable plastic manufacturing competitiveness with local and international customers. The investment will further our ambitions of achieving competitive pricing through economies of scale to increase our market share significantly in the Southern Africa region.”
Spear Capital predominantly focuses on food and beverage, retail and wholesale and pharmaceutical sectors in sub-Saharan Africa, providing between $2-10 million in growth capital to consumer-based businesses which meet its mission and investment strategy.
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