Egypt’s Citadel food unit eyes Ethiopian firm

February 22, 2010

By Humeyra Pamuk

CAIRO (Reuters) – Egyptian private equity firm Citadel Capital’s food unit is in advanced talks to buy an Ethiopian food firm in its bid to boost self-sufficiency in raw materials, the unit’s chief executive told Reuters.

Gozour’s Mohamed El Rashidi did not name the Ethiopian company, but said talks could be concluded in four months.

“It is a perfect fit for us,” he said late on Sunday, referring to the Ethiopan market. “There are 80.7 million people in Ethiopia, with a heavy consuming base and 60 percent of the country’s GDP (gross domestic product) is from food.”

The move would follow the acquisition in November of a majority stake in a Sudanese biscuit and sweet maker by Gozour, the consumer foods business of Citadel, which manages $8.3 billion in investments.

“This company (in Ethiopia) operates in a market that hosts one of our main raw materials,” Rashidi said.

The purchase would mean Gozour could start “contract farming” in Ethiopia, which Rashidi said involved financing farmers and in return reaching agreement to use the produce in factories in Egypt and eventually plants in Ethiopia.

Gozour has three primary lines of business: agri-foods and dairy, fast-moving consumer goods and intermediate industries such as flour milling and production of skimmed milk powder. More