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Publish Date : 10-Jun-2014

KKR & Co., the leading American private equity firm, is reportedly willing to acquire a stake in Afriflora, one of the major flower producers of Ethiopia, and consequently help the flower company in its strategy for expansion of business.

The leading Ethiopian flower company produces around 730 million worth of flowers every year for export purposes.

The New-York based international PE firm is interested to make investments of around $200 million out of its $6.2 billion European fund as part of a deal which will allow KKR to pierce into the African market, revealed reports in media.

The Head of KKR's operations for Africa - Kayode Akinola stated, "We see Africa as a long-term attractive investment destination… the potential is astounding. But the work to get there is going to be considerable."

KKR is planning to make its first investment in Africa at a juncture while the continent is witnessing increasing investments from PE firms, to become one of the most budding economic regions subsequent to Asia.

KKR is recognized for its leveraged buyout (LBO) of RJR Nabisco of RJR Nabisco in the year 1988.

Last year, private-equity investment in sub-Saharan Africa stands at around $1.6 billion, up 43% from the figures in 2012, according to a recent report. According to the African Development Bank (AfDB), foreign investment of around $84.3 billion is expected for 2014.

Akinola is positive that KKR's planned investment foray in Africa will be beneficial not only for Ethiopia, but for the company's investors in the end as well.

Along with KKR Executive Matteo Bozzo, Akinola will be joining the board of Afriflora too.

He has revealed that KKR has strategy to expand the farm via inclusion of 200 hectares of area with its existing 310 hectares of land under cultivation. The proposed investment will create jobs for over 5,000 people.

Akinola further said, "We have found a business that is attractive and is also having a positive impact."

At present, 80% of the Afriflora's around 8,700 workers are women. The sweetheart roses among other flowers are harvested thrice-daily and exported to Europe for selling purposes.

The European region is one of the largest export markets for the Ethiopian rose. Ethiopia has exported €131 million ($178.7 million) worth of rose flower to Europe in 2012, a large increase from the country's rose export of €62 million ($84.6 million) in 2008.

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