Abraaj invests in sub-Saharan African fertiliser company

The firm, which raised $1.3bn for its Africa funds last year, is betting on the increasing use of urea-based fertilisers around the world and Indorama’s expansion into African, US and European markets.

The Abraaj Group has bought a stake in the sub-Saharan fertiliser subsidiary of Singaporean petrochemicals group Indorama through unspecified Africa-focused funds.

Indorama is expanding in Africa, and began operations this summer in its $1.4 billion manufacturing plant in Port Harcourt, Nigeria, making it the largest fertiliser manufacturer in the sub-Saharan region, according to Abraaj. The firm also said the location of the plant gave it good access to west African countries as well as export markets in the Americas and Europe. The plant is capable of manufacturing 1.4 million tonnes of a year.

Abraaj will use its experience of investing in Africa for the last 20 years to advise on market penetration, corporate governance and future expansion plans.

“Having successfully invested in the fertiliser business in north Africa, we look forward to leveraging that know-how and working with the management team in developing the company’s route-to-market infrastructure, build its network and support its capacity expansion and product diversification plans in the region,” said Abraaj founder and group chief executive Arif Naqvi.

Abraaj, which has has deployed around $3 billion in Africa across sectors including healthcare, financial services, logistics, consumer goods, and food and beverages. It manages $10 billion across targeted investment strategies and has offices in Tunis and Cairo. Its Abraaj Africa Fund III closed at $990 million in March 2015. Its Africa-focused funds raised $1.3 billion last year.

Investments on the continent include Kool Food, a leading chocolate manufacturer in Morocco, as well as food companies Fan Milk International, Brookside Dairy and Dashen Breweries in sub-Saharan Africa.