Lona Group

Jun 9, 2022

Business Insider SA The logistics and packaging of orange fruits in a warehouse. (Image: Getty) A group of European investors, jointly with Phatisa, have acquired a minority stake in Lona, a grower, and exporter of citrus. The deal is funded out of Phatisa’s second phase food fund, worth $143 million or R2.2 billion. The capital will be used to expand the group’s operations and to construct new packhouses and orchard netting to protect crops from harsh weather. For more stories, go to www.BusinessInsider.co.za . Phatisa, a local private equity fund and a group of European investors have just acquired a minor stake in Cape Town-based citrus grower and exporter Lona Group. The value of the deal has not been disclosed, but the capital will be directed towards expanding the company. The consortium of investors includes Phatisa, British, Norwegian, and Finland-based development finance institutions (DFIs), British International Investment, Norfund, and Finnfund, respectively. The DFIs are all investors in Phatisa’s second phase food fund, targeting entities in the African food value chain. It seeks to impact food security in the sub-Saharan region positively. The Phatisa Food Fund 2 is worth $143 million or R2.2 billion. “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,” Phatisa said in a statement on Monday. With farms in five locations in the country, Lona is one of the largest citrus exporters in South Africa. It has about 50 export destinations worldwide, including key regions such as China, the UK, the USA, and parts of Africa. It exports more than 5 million 15kg cartons of fruit a year. Its operations go beyond growing and exporting citrus; it is involved across the food value chain and farms, aggregates, and packs various fruit such as mango, grape, olives, and stonefruit. It also looks after cold storage and logistics, and marketing fruit and is in fruit and vegetable processing. The company has also been steadily expanding its portfolio to value-added products, including dried fruit, through its facilities, Veggie Crisps, and local table olives producer, Cape Olive. It recently acquired majority shareholding in the Unlimited Group, an  exporter and importer of fresh fruit, vegetables, and nuts. Martin Kromat, a senior partner at Phatisa, said the equity firm had had its eye set on Lona for a while, citing the partnership would enable the companies to achieve commercial outcomes and expand its export reach. “From ‘seed to shelf’ is Lona’s philosophy. Their integration from producers to buyers is remarkable and means that fruit is carefully handled within the strictest standards, resulting in superior quality and reduced wastage,” Ryan Burns, Phatisa senior associate, said. Finding the right partner  Lona CEO, Spencer Johnson, said finding the right funder with a shared vision for growing the business was challenging. “We are proud to be partnering with such experienced, principled investors and know that we have much to share and learn from each other as we realise our vision for Lona,” Johnson said. “We are confident that Lona Group’s deep market knowledge and strong growth track record, will help to strengthen the food value chain, and increase productive and inclusive economic opportunities for low-income workers, particularly women,” said Sarah Mathies, head of PE Sector Funds, for British International Investment. Vice president and head of Agribusiness and Manufacturing of Norfund, Andreas Davidsen, said investing in Lona’s facilities, processes, and expertise is in line with Norfund’s strategy of investing in agricultural value chains and providing food security and job creation. “We are delighted to participate in this investment, which strengthens food supply, production, and distribution on the African continent and further afield, all of which enhance food security – a core tenet of Finnfund’s mission,” Markus Pentikäinen, Investment Manager at Finnfund, said.