The Abraaj Group has sold its investment in Fibrex, which makes plastic pipe products used in construction. Abraaj first invested in Fibrex in 2007.
The Abraaj Group (“Abraaj” or “the Group”), a leading investor operating in global growth markets, today announced the successful exit of its investment in Fibrex (“Fibrex” or “the Company”), a manufacturer of high-density polyethylene (HDPE) and other low-pressure plastic pipe products used in the construction industry.
Established in 1966, Fibrex initially manufactured woven bags to transport agricultural materials and fertilizers. The Company’s product line quickly evolved over time to products such as PVC and HDPE pipes for the construction industry. Being the first company in Angola devoted to the manufacture of plastic pipes and fittings, and through consistent growth over the past four decades, Fibrex has established itself as the local market leader in Angola.
Abraaj, through one of its Funds, invested in Fibrex in 2007. The Group’s close operational support has led to an upgrade in energy supply infrastructure, improved governance, accounting and reporting standards, and increased environmental efficiency in the Company.
Over the course of Abraaj’s investment, Fibrex’s production volume increased organically by over 70 per cent. The Company secured in 2010 the ISO 9001 certification, an internationally recognized award for quality management, confirming its adherence to the highest international standards. Fibrex’s production facilities were further upgraded with the recycling of by-products of the production process, including plastic sawdust and fragments, and the minimization of noise contamination.
As part of Abraaj’s commitment to building and nurturing sustainable communities in the markets where it invests, the Group worked with Fibrex and Angola’s labor and trade unions on proactive measures for HIV treatment by offering counselling, testing and adequate medical care to employees.
Commenting on the exit, Davinder Sikand, Partner and Head of Sub-Saharan Africa at The Abraaj Group, said: “At Abraaj we have an unrivaled history of pioneering the private equity industry in Africa, where our strong on-the-ground teams penetrate relatively untapped markets and gain access to opportunities that often pass under the radar of investors that are not as well entrenched in these markets. We initiated our investment in Fibrex based on Angola’s strong macroeconomic conditions. The country, focused on rehabilitating its national infrastructure, showed rapid GDP growth and demonstrated significant demand for quality construction-related material and products which has helped Fibrex attain a market leading position in the country.”
Sandeep Khanna, Managing Director at The Abraaj Group, added: “Fibrex was not only well positioned to capitalize on the wide-scale infrastructure development of Angola, but also presented impressive growth rates sustained by its ability to retain its market-leading position despite increasing competition from new foreign entrants. Fibrex remains in a strong position today to capture the continued growth of the construction industry, as Angolans and the African continent more broadly seek to address their infrastructure needs. This successful experience in Angola has strengthened our confidence in the country’s investment opportunities, increased our appetite for Angolan businesses, and boosted our search for local partner companies.”
The Abraaj Group has been investing in Africa for the past two decades and deployed USD 2.6 billion in the continent across 80 investments.