Local wheat production to benefit from new deal: Spear Capital invests in Greenwave Milling

The war in Ukraine brought an important reality to our eyes: that there was previously far too much reliance by many countries on the importation of food products, in particular wheat, from the Ukraine.

In Zimbabwe, for instance, prior to the war Russian and Ukrainian wheat accounted for nearly 60% of wheat imports used locally for self-raising flour to make confectionery products, according to the Grain Millers Association of Zimbabwe.

The disruption to food supply caused by the war — as well as by the supply chain challenges created by the pandemic — has made the world sit up and look at ways of stabilising food supply. In Zimbabwe, a new focus on increasing local wheat production is showing positive results, and there is a greater consciousness of the need to work towards import substitution by growing and producing food products locally, rather than importing them. It is against this backdrop that the private equity firm, Spear Capital, has begun to focus on investing in businesses in the SADC region that play a role in the processing of agricultural products for food production.

Their latest investment is in Greenwave Milling, which is involved in the manufacturing, packaging, and distribution of basic food commodities throughout Zimbabwe. Spear Capital announced that it has concluded an investment deal with Greenwave Milling via one of Spear Capital’s subsidiaries, Superior Food Group Africa Ltd. Previously part of the Metro Group, which is already a Spear Capital investee, Greenwave Milling is now a standalone production unit for the group. It manufactures, packages, and distributes a number of basic commodities including roller meal, refined meal, rice, cooking oil, flour, beans, salt, sugar, kapenta (a regional type of dried sardine), soya chunks, and other household essentials. Under the terms of the deal, Spear Capital, via its subsidiary Superior Foods, has provided Greenwave Milling with a substantial debt facility.

Good news for local wheat farmers is that the funding will be used to purchase raw materials for milling and down packing, and to ensure that it is able to meet growing demand for the Greenwave range of products.

Spear Capital Managing Partner, Martin Soderberg.

“Having been part of the Metro Group success story in Zimbabwe for several years now, we know how much intellectual capital there is in the business,” says Spear Capital Managing Partner, Martin Soderberg. “When some of that capital was used to launch Greenwave Milling as a standalone business, it only made sense to back it too.”

According to Soderberg, the deal will be carried out in a way that meets Spear Capital’s target UN Sustainable Development Goals (SDGs), including Gender Equality (SDG5), Decent Work, and Economic Growth (SDG8). Through the investment, Greenwave Milling aims to increase sales and its contribution to the Zimbabwean fiscus. The investment will further enhance Superior Food’s focus on building a stable food platform in Southern Africa and encourage Greenwave Milling’s ability to meet its financial and SDG commitments.

Through Spear Capital, Superior Food will provide funding to GW Milling, which is currently hard to raise in Zimbabwe, and unlock future growth and working capital. Through its shareholders, Superior Food will assist GW Milling with managing its procurement of raw materials.

About Greenwave:

Green Wave Milling (Private) Limited (“GWM”) was established on 1 January 2021 after unbundling from Metro Peech & Browne Wholesalers (Pvt) Ltd, and operates out of a 10 000 m2 packing and distribution centre located just outside of Harare, Zimbabwe. GW Milling was established with the objective to manufacture, package, and distribute quality high-value basic commodities throughout Zimbabwe under the Greenwave and White Diamond brands. The range of products under GW Milling includes roller meal, refined meal, rice, cooking oil, flour, beans, salt, sugar, kapenta, soya chunks, and other household essentials.

About Spear Capital:

SPEAR Capital is a private equity company providing growth capital through equity investments in SMEs and partnerships with leading entrepreneurs in Southern Africa. SPEAR Capital investment focuses on private fast-moving consumer goods (FMCG), and local manufacturing and processing operations to achieve shareholder value and return while sustaining successful businesses across the Southern Africa region.