RABAT, July 6 (Reuters) – Moroccan irrigation and farming company CMPG-CAS is looking to expand business in Sub-Saharan Africa where it plans to generate 20% of its sales in the first three years following its merger, CMPG CEO Youssef Moamah said.
CMPG and CAS, two of the best known Moroccan companies in the sector, announced the merger last week to join forces in developing irrigation and agricultural water management technologies, with combined annual sales of 1.7 billion dirhams ($190 mln).
The merger was financed through private equity by up to 70% while 30% was raised through bank loans, Moamah told Reuters, without offering further details on the amount of the transaction.
The company already has a presence in Senegal and Ivory Coast and plans to expand its African activity to Ghana, Nigeria, Kenya and Ethiopia, he said.
Moroccan firms and banks have rolled out investments in recent years in Sub-Saharan Africa, where the agricultural sector has lured giants such as state-owned phosphates and fertilisers producer OCP which is investing in plants in Nigeria and Ethiopia.
The presence of Moroccan banks in West Africa “was a key factor in our decision to invest in Senegal and we rely on them for our future investments”, said Moamah.
He said CMPG manufactured 50% of its equipment in Morocco and was cooperating with Israeli firms such as Netafim, a company that pioneered drip irrigation decades ago, for its industrial and African expansion projects.
Moamah said the merger had made the company better equipped to consider the possibility of an initial public offering on the Casablanca stock exchange or elsewhere in the medium term. (Reporting by Ahmed Eljechtimi; Editing by Alison Williams)