The Abraaj Group has acquired through its second generation North Africa Fund (ANAF II), a significant minority stake in Cellulose Processing (CEPRO), a leading manufacturer and distributor of baby diapers and feminine sanitary pads in Algeria.

CEPRO represents an attractive investment opportunity for Abraaj given the high population and fertility rates in Algeria.

For instance, 2014 marked the highest number of recorded births in a year in Algeria, with more than a million newborn babies.

The Algerian market has a diaper product penetration rate of 29%, compared with 35% in North Africa and 61% as the global average.

Abraaj noted that with rising disposable incomes and positive changes in consumption patterns, Algeria is one of the most promising markets for high-quality diaper products in North Africa.

Ahmed Badreldin, Partner and Regional Head of Middle East and North Africa for The Abraaj Group, said: “CEPRO represents an exciting investment partnership for us, as it is a direct beneficiary of the African consumer opportunity driven by market necessity, rapid population growth and the rise of the middle class.”

“We will apply our global experience in the consumer businesses sector to create local value through job creation, industrial development and investment, and knowledge transfer. We look forward to working closely with the Mehri Family, one of the most established entrepreneurial groups in Algeria, to further strengthen CEPRO’s position in the market and expand regionally with a focus on Sub-Saharan Africa,” he added.

Founded in 2003 by Djamel Mehri of the Mehri Family (a diversified family conglomerate in Algeria with businesses in the hospitality, telecommunications and FMCG sectors), CEPRO has grown to become the fourth largest player in the baby diapers segment by market share in Algeria.

The company has a full range of baby diaper products through its brands BBCool Premium, BBCool and Poupoune, as well as feminine sanitary pads under the brand name Finesse.

CEPRO employs over 300 people and operates nationally through a strong network, partnering with distributors across the country.

Abraaj, in partnership with the Mehri Family, will draw on its significant investment expertise to increase production capacity and efficiency, diversify CEPRO’s product offering, enhance marketing efforts through a new branding strategy, and expand its network by developing new distribution channels in Algeria and Sub-Saharan Africa.

CEPRO, which currently operates with robust corporate governance mechanisms, will look to further upgrade its Enterprise Resource Planning (ERP) system and reporting platforms.

Djamel Mehri, Founder and Chairman of CEPRO, said: “Having built the business over the last ten years into one of the leading home grown diaper manufacturers in Algeria, we believe this is an opportune time for CEPRO to expand its footprint nationally and regionally by offering the most advanced products to our clients.”

“Our group recognizes Abraaj’s deep experience in North Africa and its successful track record of developing FMCG businesses in growth markets globally. Together, we are confident of successfully executing our next phase of growth and look forward to a successful partnership,” he said.

Abraaj has helped pioneer the development of the private equity industry in North Africa and has been investing in the region since 2006.

Recent investments include leading app-based car service Careem, Moroccan oncology and imaging diagnostic centres Al Kindy and Clinique Menara, and Egyptian education provider Tiba Group.

In Algeria, Abraaj, through its North Africa Fund I, invested in leading transportation and logistics services company La Flèche Bleue Algérienne in 2014.

The Group has a dedicated team of 14 investment and operating professionals throughout North Africa, with 96% of its investments in the region having been sourced by its local teams.