ImpactAlpha, October 5 – Fragmented supply chains, inadequate technology and unpredictable power cause nearly half of food produced in Africa to go to waste. Investors led by African Infrastructure Investment Managers will invest $150 million in strengthening Africa’s cold chain.
Cold trucks, storage and related infrastructure are “critical for improving sub-Saharan Africa’s food security; allowing domestic producers to meet the standards required to participate in global trade; and creating higher value jobs through more formal food retail and wholesale models,” said AIIM’s Damilola Agbaje.
AIIM has taken a controlling stake in South Africa’s CCS Logistics, a 50-year-old logistics company with six facilities in Johannesburg, Cape Town and Walvis Bay, Namibia.
Bauta Logistics and Mokobela Shakati joined the deal and will partner with AIIM on its cold chain investment arm, Commercial Cold Holdings.
Market introduction
Cape Town-based AIIM is a private equity firm with $2.4 billion in African infrastructure assets under management across seven funds. CCS’s current markets already have better cold chain facilities than many other African markets. South Africa nevertheless “lags comparable economies such as Egypt and Brazil,” which have more cold storage space per capita, said Agbaje.
Refrigeration investment
Logistics is one of Africa’s hottest investment categories. Companies streamlining the flow of essential and often perishable goods include Kenya’s Kwanza Tukule and Logistify AI, Egypt’s OneOrder, and Uganda’s Solarchil, which have all raised venture funding this year to improve food logistics and curb waste.
Last year, Kenya’s Twiga Foods and Egypt’s MaxAB raised $50 million and $40 million, respectively, for their food logistics networks.
Governments are recognizing the need and opportunity as well. Lesotho’s economic development partnership with the U.S. includes cold chain infrastructure development. Rwanda, which launched Africa’s first “National Cooling Strategy,” has partnered with the U.K. government and U.N. Environment Programme on a sustainable cooling initiative in Africa.
