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LONDON, July 8 (Reuters) – The head of one of Tanzania’s biggest firms, Mohammed Dewji, said he plans to launch an agricultural company worth up to $4 billion in New York or London next year, with money raised mostly from development banks.
Russia’s invasion of Ukraine in February sent global grain and fertilizer prices soaring, although they have eased in recent weeks. Inflation then rose in many African countries.
Dewji, 47, whose family conglomerate MeTL Group employs tens of thousands, said the new company would produce grains and edible oils in Tanzania, Mozambique, Zambia and the Central African Republic.
“This is a fantastic way to bring food security … with the potential to feed ourselves and feed the world,” he told Reuters in an interview in London on Thursday.
He said he aims to structure the venture, which has yet to secure land, as a special purpose acquisition company (SPAC) and will invest $400 million himself as 10 to 20 percent of the total funding.
A trip to raise the remaining funds is planned for the first quarter of 2023, Dewji said, adding that he is open to other forms of fundraising.
SPACs are creations of publicly traded corporations to merge with an existing company to take it public without going through the conventional IPO process. This year, the appetite for vehicles has subsided. read more
Dewji predicted the new company, which could diversify into soybean and sugar plantations, could bring investors a five- to 10-fold return within a decade, but would require “patient, impact, long-term capital.”
MeTL, which is unlisted and operates in a range of sectors including textiles, logistics and insurance, plans to invest $250 million over the next two to three years, Dewji said, about 40% from bank loans.
This would include adding four plants across Tanzania to the existing soft drinks plant to compete with Coca-Cola and Pepsi and increasing production of sisal, a fiber plant used in textiles, from 12,000 to 15,000 tonnes this year.
He said MeTL’s current annual revenues have exceeded $2 billion and will increase this year due to high commodity prices. He declined to provide profit figures.
Reporting by Rachel Savage; editing by John Stonestreet
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