Norfund is investing in the South African-based citrus and fresh-produce exporter Lona Group.
The investment is made together with Phatisa Food Fund 2, and British International Investment (BII, formerly known as CDC Group) and Finnfund. Norfund, BII and Finnfund are also co-investors in Phatisa Food Fund 2, that was raised last year.
“We are impressed with the sophisticated supply chain Lona has developed, covering producers, logistics, and cold stores. By investing in their world-class facilities, processes and expertise, we believe we can contribute to providing food security, while creating much needed jobs, in line with Norfund’s strategy of investing in agricultural value chains”Andreas Davidsen, Vice President and head of Agribusiness and Manufacturing
Activities across the food value chain
As one of the largest integrated fruit businesses in South Africa, the Lona Group is involved in activities across the food value chain, from: farming, aggregating and packing fruit (citrus, mango, grape, olives, and stonefruit), to: cold storage and logistics, marketing fruit for export and domestic consumption, plus fruit and vegetable processing. With line of sight across the entire value chain, Lona has tight controls, traceability, and reknowned reliability amongst customers.
Beyond its own fruit production, Lona also provides an integrated platform for other producers. Plus, the business has expanded to value-add products, such as dried fruit through its two M-Pak facilities, Veggie Crisps, and the local leader in table olives – Cape Olive. More recently, it acquired a majority stake in the Unlimited Group – an integrated producer, packer, processor, exporter and importer of fresh fruit, vegetables and nuts.
Established by CEO, Spencer Johnson, in 1996 from his father’s garage, Lona now exports c. 5 million cartons of citrus, in addition to a significant volume of other fresh produce each year – predominantly to the UK and Europe, North America, the Middle East, Asia, and increasingly to the rest of the African continent.
Investing to reduce food waste and improve climate resilience
Beyond its farming and packhouse operations in the Western and Eastern Cape, Mpumalanga, Limpopo and Zimbabwe, Lona has developed some of the most advanced automated cold storage facilities on the continent. These provide Lona and their third-party customers with a state-of-the-art and efficient cold chain, thus ensuring fruit has a longer shelf life, and reducing food waste.
It is envisaged that the consortium’s expansion capital will be used to further improve Lona’s facilities, particularly the building of new packhouses, orchard netting to protect crops from adverse weather, the development of new innovative fruit and value-add products, as well as making the business more climate resilient whilst reducing its carbon footprint.