MOROCCO – Forafric Global PLC, a leading Moroccan grain trader and processor, has acquired 90% of Societe Industrielle de Minoterie du Sud (SIMS), a soft wheat milling company with primary operations in Marrakesh for an undisclosed sum.
In May this year, the Moroccan wheat milling giant expressed its intent to acquire a majority stake in SIMs by notifying the Competition Council of Morocco, an independent institution charged, within the framework of the organization of free and fair competition.
According to Saad Bendidi, chairman of Forafric, the acquisition will enable Forafric to expand its crushing capacity rapidly by more than 300 tonnes per day with minimal capital investment as part of its strategy to double crushing capacity over the next two years.
In addition, the move will boost SIMS’s capabilities, which have recently been operating at less than 50% capacity due to capital constraints, adding that official activities would be launched in August.
Despite Foreafric not disclosing the financial terms of the all-cash transaction, it did note that the deal includes the assumption of SIMS’ outstanding debt, which is scheduled to mature in yearly tranches over the next eight years.
Founded in 1926, Forafric is a leading agribusiness player in Africa with activities in Morocco and Sub-Saharan Africa. It is the milling industry leader with a complete range of flour and semolina, and secondary processing products such as pasta and couscous.
The Group operates 12 industrial units and 2 logistics platforms exporting its products to more than 45 countries around the world, more than 650 employees, and revenues of more than $200 million.
Forafric’s acquisitions follow its recent partnership with Alapala, one of the leading brands in flour milling equipment and mill projects, to expand three of its existing mills in Morocco as well as build three new mills at a total cost estimated at MAD 1 billion (US$99.5 million).
In November last year, Foreafric also expanded its presence in Mali after acquiring a majority stake in Malian cereal processing company Groupe Sahel.
According to the company, the acquisition would not only enable Foreafric to expand in West Africa but also strengthen Groupe Sahel’s production capacity and diversify its product offering. Groupe Sahel has a production capacity of 600 tonnes per day and is famously known for its Lafia brand.