Zambeef and Continental Farmers Group are digging for victory

Coming to the AIM market recently is a Zambian producer of soya, eggs, bacon, beef and other products, as part of a rise in agricultural concerns.

Joining in a float worth $55 million (£33.7 million) through its broker Renaissance Capital, Zambeef is to use the proceeds to purchase approximately 47,000 hectares worth of farmland in Zambia, and intends to use this additional farmland to become self-sufficient in the supply of wheat and able to use any surplus amount for sale to third parties.

The company is led by Irishman Francis Grogan, who has run the business for over 15 years with his business partner Carl Irwin, a Zambian-born accountant. Joining them on the board is chairman Jacob Mwanza, the former governor of the central bank of Zambia and a director on the Lusaka Stock Exchange.

As well as being a producer, Zambeef also runs a retail network in the country in addition to a number of butchery outlets.

A relatively small country, Zambeef enthuses that it has already carved out a dominant position in the Zambian market, something it is keen to add that the Zambian government fully encourages. However, its plans do not end in Zambia. The country already has a small number of retail outlets in both Ghana and Nigeria and the company is hoping to expand into the lucrative Nigerian sector in the coming years, working together with its partner Shoprite, which already has two stores in the country.

The Zambeef team has been successful so far in Zambia, and their plans for Nigeria –a country that has the likes of Wal-Mart eagerly waiting to enter –cannot be said to lack in ambition. Nonetheless, unlike other African farming concerns, the company has local connections and its board is well represented by Zambians –something that is likely to strengthen its ability to operate in the long term. For those who see potential in the sector, Zambeef represents one of the strongest Africa-focused agricultural companies I have seen.

Rifkind turns to farming

Unusually, there was not one but two AIM floats from agricultural concerns in the same month. Eastern Europe-focused farming concern Continental Farmers Group raised 16.7 million (£14.8 million) through its broker Davy.

The company is led by founder and CEO Mark Laird, a farming veteran who lived in Poland from 1994 to 2004, two years later expanding the company’s operations into the Ukraine. CFG currently produces crops including oil seed rape, sugar beet, potatoes and maize in both Poland and the Ukraine and is hoping to use the proceeds to expand its land bank in the Ukraine to over 50,000 hectares within the next five years.

Also on the board is Malcolm Rifkind, the former Tory MP for Kensington and an ex-minister of defence who worked under John Major during the Bosnian war. He is joined by a number of well- connected Irish businessmen including Thomas O’Mahony, the CEO of fully listed agricultural concern Origin Enterprises – which will see its stake in CFG dilute from 38.7 per cent to 24.2 per cent after joining AIM.

Major shareholders include Alastair Salvesen, a luminary of the seafood industry who has been a past president of the British Frozen Foods Federation and a chairman at the shellfish committee of the UK association of frozen food producers and a chairman of Dawnfresh Seafoods, which describes itself as the UK’s largest grower and seller of trout.

Agriculture is becoming an increasingly exciting sector of late, as investors ponder the long-term potential of food production in a world in which suitable land is increasingly scarce and the search for stable and long-term stores of wealth continues. The company is likely to draw comparisons with Landkom, the Ukrainian farming group that has improved immensely after replacing its board with a team with a Ukrainian farming background.

Major funds that have subscribed to the placing include Artemis and BlackRock. CFG is one to watch when it joins AIM.

Todd Cardy

Todd Cardy

Todd was Editor of between 2010 and 2011 as well as being responsible for publishing our digital and printed magazines focusing on private equity and venture capital.

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