Norfund is investing 5 million USD in 260 Brands to finance the company’s expansion into production of soymilk, creating jobs and increasing access to locally produced nutritious food.
260 Brands is an agro-processing company based in Lusaka, Zambia, that manufactures, markets, and distributes consumer products, mainly based on maize and soy. The company’s key products are textured soya pieces, powdered beverages, snacks and high energy protein supplements, primarily for the local markets. The company demonstrates value addition in soybean in various consumer foods products and beverages, besides traditional cooking oil.
“Through providing capital to allow the company to expand into the production of soymilk, 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 soymilk production facility to meet estimated potential in the market whilst benefiting from synergies with existing business and established access to soybeans.
260 Brands has developed a network of 2500 small holder farmers that supply soybeans, while receiving support for investing in its small holder farmers as long-term partners by providing agronomic training, inputs on credit and purchase of the farmer’s commodity conveniently at his or her doorstep – all helping to contribute to a profitable farming enterprise for a local, small holder farmer.
“We expect the investment to create 100 new direct permanent jobs, and an increase of local farmers that receive increased income through supplying the company of more than 12,000 small holder farmers”, says Mr Davidsen.
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 their soy milk close to dairy milk. Most of the population in the region are lactose intolerant and the company believes soymilk can be an attractive alternative. Providing the soymilk 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 liters per capita, well below the annual world average of 104. In neighbouring South Africa, the consumption is at 58 liters – in Norway it stands at 82 liters.
“We are happy to be able to contribute to the health benefits of improvements in nutrition, increased food safety and reduced imports”, said Davidsen, Norfund aims to support programs to improve productivity and infrastructure for the smallholders. There are also plans to assist the company in strengthening ESG and management systems, and to improve corporate governance.
“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, 260 Brands.
For more information visit www.norfund.no
