Successful Exit from Global Olive Oil Producer

Gulf Cap­i­tal, a lead­ing the­mat­ic Pri­vate Equi­ty firm invest­ing across the Mid­dle East and South­east Asia, announced the suc­cess­ful com­ple­tion of its exit from CHO Group, a ful­ly-inte­grat­ed pro­duc­er and glob­al exporter of olive oil and the largest oper­a­tor in North Africa. This invest­ment reflects Gulf Capital’s strat­e­gy of increas­ing its invest­ments in food secu­ri­ty and sus­tain­abil­i­ty across the Mid­dle East and South­east Asia.

Dur­ing the part­ner­ship peri­od with Gulf Cap­i­tal, CHO Group expand­ed its pro­duc­tion facil­i­ties and grew its local and glob­al foot­print through local acqui­si­tions, back­ward ver­ti­cal inte­gra­tion and expand­ing rapid­ly its glob­al export mar­kets. As a result, the Com­pa­ny grew its rev­enues by cir­ca 33 per­cent, dou­bled the num­ber of coun­tries it exports to, extend­ing its reach to a record 50 coun­tries across North Amer­i­ca, Europe, Asia and Africa, while main­tain­ing dou­ble dig­it EBITDA margins.

Found­ed in 1996 as an olive oil bulk trad­er oper­at­ing a sin­gle crush­ing mill, CHO Group today man­ages one of the largest ‘farm-to-fork’ oper­a­tions in the sec­tor glob­al­ly, using sus­tain­able farm­ing meth­ods. CHO Group has demon­strat­ed its soci­etal and envi­ron­men­tal com­mit­ment by sup­port­ing Tunisian farm­ers and millers and by pro­mot­ing var­i­ous forms of aware­ness-rais­ing “good behav­iour” prac­tices in sus­tain­able farm­ing. CHO Group is com­mit­ted to putting in place a sus­tain­able devel­op­ment strat­e­gy which is essen­tial­ly based on new plan­ta­tions for the min­i­miza­tion of its car­bon foot­print and the pro­mo­tion of invest­ments in region­al devel­op­ment areas for the cre­ation of new busi­ness oppor­tu­ni­ties, employ­ment, and wealth.

Chris Foll, Senior Man­ag­ing Direc­tor, Growth Cap­i­tal at Gulf Cap­i­tal, said: “Our strong focus on food secu­ri­ty and sus­tain­abil­i­ty, as well as CHO Group’s mar­ket lead­er­ship in Tunisia, its vision and growth plans, and its tal­ent­ed man­age­ment team made the Com­pa­ny high­ly investable with favourable growth prospects. What made the invest­ment even more attrac­tive to Gulf Cap­i­tal was the strong focus CHO Group placed on sus­tain­able farm­ing and sup­port­ing local job cre­ation. CHO Group proved us right. This sense of pur­pose led the com­pa­ny to become one of the pio­neers in sus­tain­able farm­ing in North Africa, and more specif­i­cal­ly in Tunisia, and to even­tu­al­ly become one of the lead­ing glob­al play­ers in the inte­grat­ed olive oil pro­duc­tion sector.”

Gulf Capital’s and oth­er investors’ par­tic­i­pa­tion also encour­aged CHO Group to launch notable diver­si­ty ini­tia­tives, even at the board lev­el. Today, women rep­re­sent 25 per­cent of the company’s top man­age­ment and 45 per­cent of the full time work­force, up from a low per­cent­age a few years ago.

With the help of Gulf Cap­i­tal’s growth cap­i­tal invest­ment, CHO Group has back­ward inte­grat­ed over 3,200 hectares of land, which pro­duce olives to be used by its pro­cess­ing facil­i­ties and is plan­ning on increas­ing this to 4,200 hectares over the next cou­ple of years. In the face of increased com­pe­ti­tion and infla­tion­ary raw-mate­r­i­al cost pres­sures, back­ward inte­gra­tion would help CHO Group to main­tain its strong posi­tion and grow its mar­gins despite a high infla­tion envi­ron­ment and spi­ralling ener­gy costs. Research shows that about one-third of food costs are ener­gy-relat­ed, with trans­porta­tion and pack­ag­ing costs rep­re­sent­ing the bulk of the rest.

Mr. Abde­laz­iz Makhloufi, Co-founder and CEO of CHO Group, said: “Demand for food is going to con­tin­ue to increase over the next decade, dri­ven by pop­u­la­tion growth and oth­er fac­tors. Sup­port­ed by Gulf Cap­i­tal and our oth­er investors who believed in us and shared our vision and val­ues, CHO Group has been cul­ti­vat­ing its growth on sol­id grounds and is now ready for its next phase of growth.  I want to thank Gulf Cap­i­tal for their sup­port and for pro­vid­ing us with the growth cap­i­tal nec­es­sary to fund our rapid expan­sion and glob­al exports.” The World Eco­nom­ic Forum (WEF) expects that demand for food in 2050 will be 60 per­cent greater than it is today.

Miray Zaki, Man­ag­ing Direc­tor at Gulf Cap­i­tal, who heads the Firm’s North Africa oper­a­tions and heads invest­ments in Sus­tain­abil­i­ty, added: “Through­out our part­ner­ship, we nev­er stopped to be impressed by the way CHO Group was able to build busi­ness resilience through enhanc­ing its sus­tain­able man­age­ment of resources across its pro­duc­tion and sup­ply chain process­es, lead­ing to boost­ing effi­cien­cies through­out its oper­a­tions. The Com­pa­ny was on a con­sis­tent mis­sion of improv­ing its sus­tain­abil­i­ty through pro­duc­tion, pro­duc­tiv­i­ty, ener­gy effi­cien­cy, diver­si­fi­ca­tion, inclu­sive­ness, and capac­i­ty devel­op­ment, while cre­at­ing new jobs and gen­er­at­ing shared val­ue for its employ­ees, work­ers, and investors. The world-class man­age­ment team have tru­ly been the best part­ners an investor would hope for.  We wish CHO Group all the best on their next phase of growth.”