8 Miles leads $80m Nigerian biscuit investment

Pan-African private equity firm 8 Miles has led an $80 million investment into a Nigerian biscuit company, alongside sub-Saharan focused private equity firm African Capital Alliance and development finance institution DEG.

The minority-stake investment into Beloxxi Industries will help the company expand production and distribution of its products in Nigeria and other African countries, according to a press release.

“The snacks segment is a fast growing part of the consumer sector in Nigeria,” 8 Miles co-managing partner and co-founder Nathan Mintah said in a statement. “Our investment will build on Beloxxi’s strong brand and help accelerate the company’s expansion in Nigeria, in the wider West Africa region and beyond.”

The company’s growth will also demonstrate the potential for Nigerian food manufacturers to operate on a large scale, according to ACA principal and head of FMCG Segun Adebanji. Alongside other investors he also emphasised the investment’s role in creating jobs and building up professionalism in the food manufacturing sector.

Population growth, rising disposable incomes and urbanisation are driving demand for convenient snack products like biscuits and crisps. Sweet and savoury snack businesses in Nigeria are expected to post a compound annual growth rate of 5 percent this year, according to a Euromonitor study.

“The investment will enable us increase our capacity significantly and grow in both our domestic and export markets,” said Beloxxi founder and chief executive Obi Ezeude, adding that the participating investors would help the company adhere to international standards.

Beloxxi, whose products include Nigeria’s highest-selling cream cracker, has grown more than 30 percent a year in recent years, according to the company. It has a production plant in Ogun State and several warehouses across the country.

Both private and public investors have been committing funds to Nigeria’s food sector in recent years.

Last month, alternative asset manager Duet Private Equity and the Asset Management Corporation of Nigeria began raising a distressed and turnaround capital and debt fund for food and drinks businesses in Nigeria.

Meanwhile, the Nigeria Sovereign Investment Authority has committed $100 million to an Old Mutual Investment Group agriculture co-investment vehicle this month, according to local media.

“Nigeria is currently going through a challenging macroeconomic environment. The non-oil sector, which has carried the Nigerian economy for the past several years, failed to do so [in] the first half of the year,” managing director of Duet’s Africa team, Maty Ndiaye told Agri Investor last month.  “However sectors such as food and beverages and agro processing are still showing great resilience. We see these sectors as defensive and believe that with the recent currency devaluation the ‘import substitution’ theme will be even stronger in Nigeria.”