Gulf-based investors are becoming increasingly interested in North Africa, and in the latest development, Dubai-based Abraaj Group has acquired a major stake in the Morocco-based chocolate manufacturer Kool Food for an undisclosed sum. Kool is a fast-growing business with strong growth prospects at home and in the wider North Africa region.
Abraaj has been expanding aggressively across a number of regions. In 2013 it acquired Ghana's leading dairy company Fan Milk in partnership with Danone for US$300mn, and earlier in 2014 Abraaj teamed up with the European Bank for Reconstruction and Development to acquire a controlling stake in Turkish dairy company Yorsan Group ( see 'Abraaj-Yorsan Deal Highlights Long-Term Appeal Of Food Sector', January 24).
Over the past three or so years, Kraft Foods (now Mondelez International) and Danone have made major acquisitions in Morocco. The country's food and drink sector is relatively well developed, and the regulatory environment is also perhaps the best in the North Africa region. In our opinion, this makes Morocco a strong base from which to export to the wider region.
Kool Food's main business is making chocolate; however, it also has a number of other business lines, including juice products and sweet and savoury snacks. The equity investment is likely to provide the company with a greater platform to grow its brand further, allowing it to potentially scale up manufacturing output as well as improve cost structures.
|North Africa Has Long-Term Appeal|
|Select Countries - Real Private Final Consumption (% chg y-o-y)|