Abraaj Group, a Dubai-based investor in global growth markets, has announced its successful exit from an investment in Fibrex, a Luanda-based manufacturer of high-density polyethylene and low-pressure plastic pipe products for the Angolan construction industry.
Established in 1966, Fibrex initially manufactured woven bags to transport agricultural materials. It was subsequently the first company to manufacture plastic pipes and fittings in Angola and, as the local market leader, has since achieved four decades of consistent growth.
Abraaj invested in Fibrex through one of its Funds in 2007, and through close operational support of the company assisted in the upgrade of energy supply infrastructure, improved governance, accounting and reporting standards, and increased environmental efficiency.
Davinder Sikand, head of Sub-Saharan Africa at Abraaj, said: “We have an unrivalled history of pioneering private equity in Africa, where our teams penetrate relatively untapped markets. We initiated our investment in Fibrex based on Angola’s strong macroeconomic conditions.
“The country, focused on rehabilitating its national infrastructure, showed rapid GDP growth and demonstrated significant demand for quality construction-related material and products which has helped Fibrex attain a market leading position in the country.”
Over the course of Abraaj’s investment, Fibrex witnessed an increase of over 70% in its production volume, and in 2010 the firm secured ISO 9001 for the recycling of plastic by-products of the production process, and the minimisation of any noise contamination.
Sandeep Khanna, MD at Abraaj, added: “Fibrex was not only well positioned to capitalise on infrastructure development of Angola, but also presented impressive growth rates sustained by its ability to retain its market-leading position despite increasing competition from new foreign entrants.
“Fibrex remains in a strong position today as Angolans and the African continent more broadly seek to address their infrastructure needs. This successful experience has strengthened our appetite for Angolan businesses, and boosted our search for local partner companies.”
As a final aspect of the investment interaction, Abraaj worked with Fibrex and Angola’s labour and trade unions on developing proactive measures for the HIV treatment at the Angolan firm by offering counselling, testing and adequate medical care to employees.
Abraaj is otherwise better known for its high-profile investments in Ghana and West Africa, where in 2013 it acquired Ghana Home Loans and instigated a $360m joint acquisition of Fan Milk, a prominent producer of West African frozen dairy products, with France’s Danone.
In the last two months, the group also announced plans to raise an additional 500m-$750m in capital and deploy $200m-$300m in sub-Saharan Africa over the next 12 months, and has also been associated with plans by the Swiss investment bank, Edmond de Rothschild, US-based Carlyle Group to raise $530m in equity for another Africa-focused investment fund.
These also featured in Gulf Africa Review’s quarterly summary of the top investment deals between the Gulf Cooperation Council (GCC) and Sub-Saharan Africa for the second quarter of this year.