Synergy Private Equity Fund (SPEF) has invested an undisclosed amount in Riggs Ventures West Africa, a non-captive manufacturer of polypropylene woven sacks for packaging and transporting industrial goods in Nigeria.

The first tranche of the investment by SPEF is aimed at boosting working capital to increase Riggs’s capacity utilization to satisfy the current supply gap in the polypropylene (PP) bag industry created from the increase in demand from off-takers benefiting from increased investment and consumption in a number of fast growing sectors in Nigeria.

SPEF expects to make a follow-on investment to further scale up capacity to become one of the biggest operators in PP woven sacks across West Africa.

The investment, which was made four months ago, was only recently approved by the Securities and Exchange Commission (SEC) as the company is an unlisted public company.

Ayodele Arogbo, Partner at Synergy Capital Managers, said the investment in Riggs fits perfectly with the strategy of the Fund to identify the right operators in the fastest growing sectors and partner with these companies by providing them institutional building capacity in addition to capital, which will help establish these operators as significant players with a substantial share of their markets.

“In the case of Riggs, the objective is to establish the company as a clear number three in a sector that is set for continuous growth over the medium to long term. We are very pleased to be completing this investment now after all the work done preparing the company over the last two years,” he said.

With this investment, Riggs is confident that it can achieve its goal of diversifying its business into the production of other bag segments such as agro sacks, petrochemical bags and Jumbo bags, a niche area with less competition, higher margins and the opportunity to export to neighboring countries in Africa and beyond.

Yomi Tokosi, Founder and Vice Chairman of Riggs, said that SPEF’s investment came at a critical period in the life of the company, as this will definitely reposition the company to exploit the numerous opportunities abundant in the sector.

“In the course of setting–up and operating the sack factory, it became evident that running a manufacturing concern of this magnitude is certainly a capital intensive exercise which, though it has huge prospects for great returns on investment, equally demands perseverance to overcome the teething challenges usually faced at the initial stages of the business,” he said.

“Most importantly, the project requires long-term funds in order to make the necessary investments to facilitate the smooth operation of an enterprise of the scale that Riggs intends to achieve,” he added.

Synergy focuses on expansion and growth capital in Nigeria and Ghana.

Arogbo said this investment is a further demonstration of the commitment to supporting small and mid-sized businesses.

“We remain firm believers that this segment is integral to the emergence of both countries’ economic powerhouses not just in the region but also among the leading emerging economies in the world. The pace of investments is set to accelerate with at least four investments to be completed over the next year,” he said.