Farming and Engineering Services Limited, FES, is the single largest investor in Malawi’s agricultural equipment industry.
Together with Phatisa Food Fund 2, Norfund and other co-investors have acquired the Malawian provider of agricultural equipment and services Farming and Engineering Services Limited (FES).
Supporting growth & expansion to neighboring countries
Norfund has committed an equity and loan investment of up to USD 12.6 million to FES. The investment will support the company’s growth strategy and help it expand its business model to neighboring countries.
FES’ impact objectives are to mechanise African agriculture, ensure food security and enhance farmer profitability – which is aligned with the UN Sustainability goals.
Providing high-tech agricultural solutions
FES provides a wide range of high-tech agricultural solutions including:
- precision and low-till farming;
- drone technology for crop analysis and crop protection;
- irrigation systems including water management solutions;
- contracting services.
Located in a region where resources are limited and input costs high, FES has expanded its offering to include a comprehensive range of climate-resilient precision agricultural solutions. FES is the sole distributor of several well-known and trusted brands, including Massey Ferguson, Komatsu, AJ Power and Toyota Forklift.
The company was also the initiator of Malawi’s first independent soil- and leaf-testing facility, AgriLab, which allows farmers to test, manage and control their soil, leaf and water quality. This initiative contributes to improved yields and crop quality, increased revenue and reduced input costs.
“This transaction is a vote of confidence in the entire FES team. Over the years we have evolved from purely an equipment supplier to an integrated agricultural solutions provider that continuously looks at ways to expand our offering to assist our clients. With the support of our new partners, FES looks forward to the new growth chapter that awaits us.”
Mike Aldworth, Group Managing Director of FES
Expanding into Zambia
As part of the company’s expansion strategy, FES is acquiring the business assets of agricultural equipment supplier BHBW Zambia. On the back of this, AGCO has agreed to award FES the Massey Ferguson and Challenger franchises for Zambia. FES intends to replicate its successful model of equipment dealership with precision contract farming and other agricultural solutions in Zambia.
“FES is a world-class operation in a developing country. This investment is fully in line with Norfund’s mandate to support economic growth and development impact in these countries. We look forward to being an active, strategic minority investor in FES and supporting its regional growth ambitions.”
Olav AkRawi, Senior Associate, Norfund