Armarium, a Mauritian agri investment company, is fundraising for a range of projects in Zambia’s agriculture sector. The company needs just over $10 million to establish a nursery for permanent crops and seed crops and an agro-processing park for wheat, soya and maize processing.
The company is targeting family office and private banking capital, and offering different ways to obtain exposure to the projects.
Investors interested in crop cultivation can either invest into a specific project and own a share of that Zambian registered business, or purchase their own orchards under a different ownership structure and hire Armarium to manage the land for a service fee. The company wants to raise $500,000 initially to get the nursery up and running.
These projects are taking place in the Serenje region and will also involve building processing facilities. Armarium wants to raise $750,000 to build these facilities.
The wheat, soya and maize agro-processing opportunity is one project that will be expanded onto 4,890 hectares of land in the Mpongwe area of Zambia, some 500 km away. The company wants to raise $9 million to launch this project.
While the initial capital raise is quite small, the projects are all very scalable, according to Thomas Hill, director of business development at Armarium.
“The number mentioned is just to get the projects off the ground but they can be structured to be multi-million dollar deals,” he told Agri Investor. “Just 30 percent of Zambia’s agri-land is utilised; at least 50 percent should be in production so there is a big opportunity to utilise the land and bring participation to local farmers and expand their ability to produce.”
Armarium has identified a large market for dried mangoes in Europe, and macadamia nuts worldwide which can be sold for $10,000 a tonne and $3,500 a tonne respectively. But as there is a three- to four- year window before the permanent crops start producing, Armarium is also focusing on functional foods that can yield returns more quickly, such as sunchokes, a tuber that produces the dietary fibre inulin, black seeds and sesame.
The agro-processing project will service larger agricultural groups that are already producing staple commodities such as wheat, maize and soya. And later the company will expand into rice production and processing, according to Hill.
Zambia’s land laws are more progressive than other sub-Saharan African nations as investors can hold farmland deeds, which are organised on a 99-year lease.
“These leases are also renewable and tradable and can be bought through bank holdings,” said Hill. “We have seen some very large funds investing in Zambian farmland so we know it has already been well thought through.”
Armarium has already established partnerships with local leaders and senior chiefs who will, in some cases, enter into a joint venture with Armarium and its investors.
Political risk insurance can also be provided by Lloyd’s of London and the World Bank adding extra comfort, he added.
Hill is currently roadshowing the projects to various private banking and family office groups.