Mergence Investment Managers (Lesotho) has acquired the remaining 51% of the shares in Sanlei Premium Trout, an integrated aquaculture producer of Africa’s largest sushi-grade trout. 

Semoli Mokhanoi, Managing Director, Mergence Investment Managers (Lesotho), said that Mergence bought an initial stake in Sanlei in 2019. 

“Mergence is in the process of raising capital to deploy expansion and working capital to further scale up Sanlei’s operations to attract other potential customers, particularly further in the Far East as well as in the European Union,” he said.

The stake was sold to Mergence by the former co-investor, a private family capital fund backed exclusively by industry-leading families, largely from the USA.

The investment sits in Mergence’s Lesotho Private Equity Fund, whose main investor is the largest pension fund in Lesotho. Accordingly, the investment sits fully in-country with benefits to the Basotho such as improving food security, sustaining 102 jobs and generating hard currency revenues.

As a commercial-scale rainbow trout farm, Sanlei is located on the edge of the Katse Dam in the remote highlands of Lesotho, a site known for its deep, pristine waters and highly favourable environment for growing premium trout. 

Sanlei is the largest trout farming operation in Southern Africa and has successfully farmed rainbow trout since 2018.

Sanlei has the licence and physical infrastructure capacity to supply the bulk of the South African rainbow trout market. In addition it has a fast-growing niche export market, currently focused on the USA.

Following successful trials, Sanlei has recently been appointed as a permanent supplier to one of the largest FMCG retailers in the USA with a nationwide footprint of over 2,000 stores.

Sanlei CEO Dewald Fourie said that they are delighted to have entered the massive US market which will make a significant boost to Lesotho’s export capability, food security, provide access to as hard-currency dollar revenue stream, as well as grow the Lesotho country brand on a global scale.

“Growth projections are to double the current trout production of 1,000 tons of trout per annum to 2,000 tons by 2030,” he said.

The 100% Mergence investment in Sanlei is strategically aligned with the asset manager’s focus on Lesotho’s national development plans and the United Nations’ Sustainable Development Goal (SDG) 2, aimed at ending hunger, achieving food security and improved nutrition and promoting sustainable agriculture.

As an institutional impact investor, Mergence requires Sanlei as an investee company to report back on strict environmental, social and governance (ESG) criteria. 

In June 2024, Sanlei achieved Best Aquaculture Practices (BAP) certification from the Global Seafood Alliance, an international standard for sustainable produce. Sanlei’s farm and hatchery are the first in Lesotho to attain BAP certification, as well as the first farm and hatchery on the continent.

The company measures various water parameters including phosphorus, pH and oxygen levels at regular intervals to remain within set sustainable limits for healthy water bodies. Rigorous requirements are adhered to in order to minimise disease outbreaks and antibiotic use.

A special feed formula adheres to strict limits to minimise the use of wild fish as an ingredient for feed and the farm by design runs at lower stocking densities than the industry average in order to benefit fish welfare and product quality.

As the largest employer in the local Katse community, Sanlei currently sustains 102 jobs in Lesotho. 34% of the workforce are women. With the planned expansion of the production facilities over the next two to three years, the number of jobs is expected to increase significantly.

All employees are remunerated well above the Lesotho minimum wage, and receive healthcare, pension, death and disability cover as well as a funeral policy. Further education and training are also provided, with most of the courses and certifications focused on aquaculture production management, leadership and operations management, maintenance for food safety and vaccination training.

Local companies are used for the transport of certain supplies and staff, as well as clearing agents for imports and exports.

Sanlei provides Mergence with regular beneficiation reports which detail its relationship with the surrounding communities from where the workforce is derived. There are two primary beneficiation projects, The Rosehip Company and the Khokhoba CaRe Fund, which help to generate additional income streams for the local communities and to complement Sanlei’s operations.

Sanlei is committed to upholding the highest standards of corporate governance, ensuring transparency, accountability and ethical practices in all aspects of its operations. The robust governance framework is designed to foster trust and enhance stakeholder value.