South Africa Magazine goes to Zambia and learns more about Zambeef, the country’s agri-business powerhouse.

By Ian Armitage

Zambeef is one of the largest agri-businesses in Zambia and is a national, as well as African, success story.

The company began life as a small butcher shop in the capital, Lusaka in 1991.

It has since grown to become one of the biggest food production businesses on this continent.

And it produces just about anything.

In fact, place "Zam" in front of just about any food product, and there is a pretty good chance Zambeef Products PLC is making it.

Unsurprisingly, its tagline is ‘Feeding the Nation’.

“We are one of the largest agri-businesses in Zambia,” Justo Kopulande, Zambeef Product’s head of public relations told a South Africa Magazine researcher.

Zambeef is a real giant, involved in the production, processing, distribution and retailing of beef, chicken, pork, milk, dairy products, eggs, edible oils, stock feed, flour and bread.

It also has large row cropping (maize, soya beans and wheat) operations, with around 5,000 Ha of row crops under irrigation and 1,500 Ha of rain-fed/dry-land crops available for planting each year, according to the company’s website.

Zambeef is in the process of rolling out West Africa expansion in Nigeria and Ghana too, in conjunction with Shoprite, as well as a palm project within Zambia.

“Those are certainly the big developments,” Kopulande said.

Zambeef’s financials are impressive. It had annual revenues of ZMK770.5 billion (US$162 million) for the financial year ended 30 September 2010.

“We have one of the leading distribution and retail footprints in Zambia,” Kopulande added.

Zambeef currently operates 87 stores under the Zambeef banner and 20 in-house butcheries in Shoprite supermarket outlets in Zambia, while it has seven of its own fast food outlets under the brand Zamchick Inn.

It operates two in-house butcheries in Shoprite outlets and four stores under the Zambeef banner in Nigeria and a further two in-house butcheries in Shoprite outlets in Ghana, Zambeef’s website says.

NIGERIAN EXPANSION
In Febuary Zambeef announced it had invested US$10million at a farm at Ikenna, 80km from Nigeria’s capital Lagos.

It includes a meat processing facility and soybean farming, the company said.

“We have already developed a supply chain in Nigeria over the past two years,” Kopulande told our researcher. “Nigeria is important to us going forward.”

Zambeef's road to Nigeria began in 2009, after Shoprite had expanded into the country from the supermarket chain's base in South Africa.

Zambeef operates Shoprite stores in Zambia, and the chain wanted to use Zambeef as a supplier and to staff Shoprite butchery counters in Nigeria.

Zambeef has invested around US$2 million in Nigeria and plans to invest a further US$8 million over the next eight years to hire staff, open more Master Meats shops and use the Ikenne farm as a hub to supply neighbouring countries, its website says.

Zambeef predicts revenue will more than double in Nigeria by year-end.

"What Zambeef has been able to do in Nigeria in a very short time frame is nothing short of a miracle," Gerhard Fritz, Africa operations manager for Shoprite, was quoted as saying recently.

PALM OIL
In January Zambeef announced plans to boost its palm oil plantation in Mpika.

It is a significant move for the firm, according to Kopulande.

Zambeef said it will invest US$2.5 million in the palm plantation in Mpika, which when in operation would be the lead exporter of crushed palm oil in the region.

In a statement, Zambeef CEO Francis Grogan said that the 20,000 Ha plantation -- which was launched in 2008 -- would be boosted further to make it achieve its potential and produce the long-term benefits.

"Zambeef remains committed to develop its palm plantation,'' he said.

Zambia is among the largest importers of palm oil from Asia, with Zambeef importing large quantities from Malaysia, which it uses in its limping unit at Zamanita, he added.

To achieve a healthy crop yield, Zambeef has engaged palm experts from Palm Oil Technology of South Africa, one of the leading palm consultants in the world, said Kopulande.

Zambeef's subsidiary, Zampalm Limited, has already planted the first 3,000 Ha of palms.

“The palm oil project will not benefit Zambeef in terms of exports, but would also play a key role in our business,” Kopulande said.

“Palm oil will play a key part in our future,” he added.

AIM LISTING
Zambeef recently became the first Zambian company to list on London's alternative investment market (AIM), raising US$55 million in total in conjunction with a domestic rights issue.

It listed just weeks ago and the listing is seen as an indication that local companies have the potential to penetrate the international market -- Kopulande told our researcher that it is a sign that Zambia has an ability to penetrate more international markets.

“We are becoming a more global business, yes,” he said.

The US$55 million raised via a listing on AIM will be used to bankroll the acquisition of ETC Bio-energy Limited, which the firm bought at US$45 million in a transaction completed in June.

According Kopulande, the acquisition of ETC Bio-energy Limited will lead to Zambeef controlling almost 100,000 Ha of farmland in Zambia.

The three farms which form the deal -- Nampamba, Chambatata and Kampemba Farms on the Zambian Copperbelt -- extend over a total of more than 46,000 hectares.

“These assets will provide the Group with the agricultural throughput for its processing operations which the board believes should generate additional value and higher margin whilst reducing impact of the volatility of commodity price fluctuations and an erratic supply chain on the Group,” CEO Francis Grogan said in a statement following the firm’s AIM listing.

He added that Zambeef Group had raised US$54.97 million in aggregate by way of both a rights issue of 33,558,580 new ordinary shares to existing investors via Lusaka Stock Exchange (LuSE).

“We are delighted that the AIM flotation has been completed successfully and with such high investor demand for Zambeef shares,” Grogan, who is also co-founder of Zambeef, said. “We now look forward to working with our new and existing shareholders whom we would like to thank for their ongoing support as we continue to grow and expand.

“The growing demand for agricultural products and consumer goods in sub-Saharan Africa together with the increasingly stable political climate in the countries in which we operate creates an exciting platform on which Zambeef can thrive.”

Zambeef’s goal is to increase efficiency and capacity in its primary production facilities, ensuring it remains a low cost protein producer in the region. It also wants to expand its retail and wholesale distribution channels in order to “increase market penetration in the region”.

To learn more visit www.zambeefplc.com.

Image: Zambeef