REG - Zambeef Products PLC - USD100m Investment Strategy

Zambeef ProductsAnnouncement

16/06/2022 09:30

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RNS Number : 1282P  Zambeef Products PLC  16 June 2022

 

 

Zambeef Products plc

("Zambeef", the "Company" or the "Group")

 

USD100m Investment Strategy

ZAMBEEF IS EXPANDING

 

Zambeef (AIM: ZAM), the fully integrated cold chain foods and retail business
with operations in Zambia, Nigeria and Ghana, is pleased to announce that the
Board has agreed on a USD100m expansion strategy across its core operating
divisions over the next three to five years. Funding is expected to come from
cashflow generated from operations, subject to future financial performance
over the investment period, together with new debt facilities to be agreed in
due course.

This investment strategy is expected to increase Zambeef's various value chain
capacities, and deliver developmental impact to the Zambian economy through
job creation, increased tax revenue and supporting ancillary businesses such
as small-scale farmers and small to medium-sized businesses.

The strategy is expected to double the Zambeef Mpongwe Farm row cropping
capacity, and also to deliver significantly improved production efficiency and
capacity through the downstream food value chains. This investment is proof of
the Company's commitment and belief in the country's ambition of becoming the
regional food basket. The investment strategy could not have come at a better
time, as the world is grappling with significant food price inflation and the
risk of an imminent food crisis. The first crop from the expanded cropping
operations is expected to be planted in the winter of 2023 with capacity
upgrades to milling and processing facilities being run in parallel.

This announced investment will also see the strengthening of the Company's
environmental and sustainability agenda through upgrading and optimisation of
existing facilities. This will see the improvement in the Company's carbon
footprint and livestock health and welfare.

First investment under the new strategy is intended to commence imminently,
with up to USD10m of spending in the remainder of the current financial year
to 30 September 2022, funded from FY22 cashflow.

The Chairman of the Board, Mr Michael Mundashi SC, commented: "I am excited to
be announcing an investment strategy of this magnitude, doubling the cropping
capacity at a time when Zambia, Africa and the world need investments of this
nature. The intended investment over the coming years entrenches our position
as the number one vertically integrated cold chain food products and
agribusiness company in Zambia and the region."

"The last two decades have seen the Group significantly grow in the scale of
our operations and I am excited at the next phase of growth. The management
team is elated, and I am confident in their capacity to deliver the projects
quickly and effectively."

At this time there is no certainty in relation to the availability of debt
funding for this investment strategy, and the Company will make further
announcements in relation to funding and execution of the investment strategy
in due course.

For further information, please visit www.zambeefplc.com or contact:

 

 Zambeef Products plc                      Tel:  +260 (0) 211 369003
 Walter Roodt, Chief Executive Office
 Faith Mukutu, Chief Financial Officer

 finnCap (Nominated Adviser and Broker)    Tel: +44 (0) 20 7220 0500
 Ed Frisby/Tim Harper (Corporate Finance)
 Tim Redfern/Barney Hayward (ECM)

 Autus Securities Limited                  Tel: +260 (0) 761 002 002
 Mataka Nkhoma

About Zambeef Products Plc

Zambeef Products Plc is the largest integrated cold chain food products and
agribusiness company in Zambia and one of the largest in the region, involved
in the primary production, processing, distribution and retailing of beef,
chicken, pork, milk, eggs, dairy products, fish, flour and stockfeed,
throughout Zambia and the surrounding region, as well as Nigeria and Ghana.

It has 236 retail outlets throughout Zambia and West Africa.

The Company is one of the largest suppliers of beef in Zambia. Five beef
abattoirs and three feedlots are located throughout Zambia, with a capacity to
slaughter 230,000 cattle a year. It is also one of the largest chicken and egg
producers in Zambia, with a capacity of 8.8m broilers and 22.4 million day-old
chicks a year. It is one of the largest piggeries, pig abattoirs and pork
processing plants in Zambia, with a capacity to slaughter 75,000 pigs a year,
while its dairy has a capacity of 120,000 litres per day.

 

The Group is also one of the largest cereal row cropping operations in Zambia,
with approximately 7,787 hectares of row crops under irrigation, which are
planted twice a year, and a further 8,694 hectares of rainfed/dry-land crops
available for planting each year.

 

More information is available at www.zambeefplc.com
(http://www.zambeefplc.com)

 

The information contained within this announcement is deemed to constitute
inside information as stipulated under the retained EU law version of the
Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK
law by virtue of the European Union (Withdrawal) Act 2018. The information is
disclosed in accordance with the Company's obligations under Article 17 of the
UK MAR. Upon the publication of this announcement, this inside information is
now considered to be in the public domain.

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