French yeast manufacturer LeSaffre has announced a new joint venture manufacturing operation with Tracon Group in Ethiopia. The partnership will see Tracon manufacture the Saf brand of yeast locally.
Tracon is one of the largest FMCG distributors in Ethiopia. The parent company is involved in real estate, trading of steel and the export of coffee. It is also the manufacturing partner for Ontex in Ethiopia and a key distributor for Unilever.
The move is important strategically for Lessafre as it looks to expand its presence into non-francophone markets, where it has traditionally been weaker (the brand is very strong in former French colonies). In January 2020 Lesaffre opened its first Baking Center (a local facility to improve customer-centric innovation) in West Africa in Abidjan, Côte d’Ivoire.
A major hurdle in Ethiopia is the lack of availability of fx needed to import FMCG goods – essential products such as pharmaceuticals are given priority. A local manufacturing JV partly solves this issue, although it still probably means that Lesaffre will be unable to repatriate any profits for some time.
In 2018, Lesaffre acquired Rayen Food Industries in Tunisia. It also has a manufacturing site in Morocco and a facility to manufacture bread improvers in Algeria. In 2015 it acquired a 60% shareholding in Zimbabwean yeast manufacturer, Anchor Holdings, in a deal worth $8.4m.
The company also manufactures at its site in Egypt. In 2020 it aimed to export 8,000 tonnes of yeast from its Egypt factory to Saudi Arabia, Kenya, Syria, Palestine, Mozambique, and Mauritania, compared to 6,000 tonnes in 2019. Its Egypt factory has two production lines: one to produce dry yeast, which has a production capacity estimated at 21,000 tonnes annually; the other for the production of fresh yeast, which has a production capacity estimated at about 18,000 tonnes annually.
