Kampala- Pearl Capital Partners, a specialist agriculture investment firm, has invested $1.5million (about Shs3.7billion) in a local export company, KK Foods, which supplies fresh produce to European markets.
The Managing Director of KK Foods, Mr James Kanyije, in an interview yesterday, confirmed that his company had secured the funds, describing the deal as important and timely.
KK Foods is a major exporter of fresh vegetables and fruits to the European market.
Its main products are fresh chillies, hot pepper, bananas, okra, egg plants and groundnuts, mainly produced from smallholder farmers in Central and Western Uganda.
According to investment and economic analysts, this venture will boost KK Foods ability to supply the European market more efficiently while at the same time reap more in terms of profits than it previously did although it will also give up some of its control to the investment firm.
The fund, African Agricultural Capital Fund where the investment was drawn, is now two years into its investment phase and has investment commitments of $25 million (about Shs61billion). It aims to invest in 15-20 East African businesses operating in the agriculture sector within the next three to four years.
“Pearl has invested $1.5 million in the Uganda-based company KK Foods to acquire a substantial minority stake in the business,” reads the press statement signed by Mr Mike Kinuthia, who is the investment manager of Pearl Capital Partners.
He added that the investment will build momentum in the company’s growth while enhancing the transformation of Uganda’s agricultural export sector.
ABOUT AFRICAN AGRICULTURAL CAPITAL FUND
About African Agricultural Capital Fund (AACF) which the fund to invest in KK Foods was drawn, was established in 2011 with commitments of $17 million in equity from the Bill and Melinda Gates Foundation, the Rockefeller Foundation and the Gatsby Charitable Foundation. JP Morgan Social Finance has committed an additional $8 million in debt to the Fund with the support of a partial guarantee from United States Agency for International Development (USAID).
USAID has also committed a further $1.5 million (about Shs 3.7 billion) to the Fund.