SA investor targets Zim's FMCG sector

South African entrepreneur, Andrew Robinson

Published: 14 June 2014

South African entrepreneur, Andrew Robinson backed by a group of private equity funds, could invest a staggering $100 million on prime assets available at a discount in the country.

Mr Robinson is expected to make an announcement soon on opportunities that have been identified in the country thus far. He described Zimbabwe as "an elephant about to stand up".

The targeted investments form part of grand strategy to forage for opportunities in Africa, but immediate focus would for now be concentrated on Zimbabwe.

Mr Robinson told South African media last week that they will "get the money out of the country again when and if we need to".

"I head up a group of private-sector investors who are looking over the year to inject more than $100 million into Zimbabwe," he said.

The 36-year-old entrepreneur works primarily in the fast moving consumer goods sector, focussing on consumer goods in the alcohol, beverages, food and pharmaceutical sectors.

"I cannot disclose the details of the deal as it is at a sensitive stage, but this substantial investment is being made on the basis that the returns are there to be made," he said.

Mr Robinson has over the past 18 months concluded a deal pipeline worth $250 million and has done deals worth some $50 million over the past 12 months.

He concentrates in the $20 million-plus range, but favours the $100 million dollar space as there is a lot of capital looking for such deals in Africa.

"The story of Africa is a great one. People are shifting capital into Africa but the reality is that not many people and institutions are finding the right deals to deploy their capital," he said. He describes opportunities available on the continent, particularly Zimbabwe, as daunting but exciting with "so much going on".

"I, for one, see the country as a slumbering giant about to awaken and I believe that when it does, it will rocket into a new era of prosperity that will fundamentally redefine our region," he said.

Mr Robinson said they did not ignore the downside risks, which include liquidity challenges and high real interest rates on short-term credit, ballooning public-sector wage bills, ailing infrastructure and unreliable power supply.

"Rather, we put more stock in pent-up demand, an educated population, increasingly pragmatic policy makers and wonderful commercial opportunities, not only is much of the land lying fallow, so too is the industrial infrastructure."

He said Zimbabwe had all underlying attributes of a healthy economy, despite its human and physical capital being degraded over the past 20 years.

However, he had seen rising corps of sensible, educated and ideologically pragmatic business people, bureaucrats and politicians re-emerging. While other investors have shied away citing some perceived harsh investment laws, Mr Robinson said he had been heartened by Youth, Indigenisation and Economic Empowerment Minister Francis Nhema's pronouncements that there would be some flexibility to investment deals on an individual basis outside mining. Seemingly thawing relations and engagements between Government and the Commercial Farmers Union, representing former white commercial farmers whose land was compulsorily acquired to resettle the landless majority, further galvanized his belief the country was readying for investment.

He also commended Government's appointment of seasoned banker, Dr John Mangudya, as Reserve Bank of Zimbabwe Governor, saying he was the right man to steer the monetary policy.

Mr Robinson is not new to risk, having lost a $10 million fortune by the time he was 30, selling Sippah flavoured milk straws and learned a valuable lesson that good ideals do not always stand a chance against better resourced multinationals, to which he lost huge money in court battles.

He would take a sabbatical from business for a year, and on return was wiser and kinder, targeting distressed African companies, taking a controlling stake in them and through the application of capital, energy and skills and turn them around.
- The Herald