Financial close heralds start of construction of a modern state of the art Liquefied Petroleum Gas cylinder manufacturing plant.
Bluedrop, expected to create 110 direct jobs
Johannesburg, Wednesday, 7 April 2021 – Johannesburg based South African start-up Bluedrop, has secured a R300 million investment from J. Sassoon Group, a US, Washington DC based private equity fund, for their Liquefied Petroleum Gas (LPG) cylinder manufacturing plant, in the west of Johannesburg, South Africa. The project is expected to create 110 direct jobs during construction and 35 direct jobs at full commercial operation. Using the highest standards in manufacturing processes along with the latest technology, and raw materials designed to reduce carbon footprint, Bluedrop will be setting a new standard for South Africa’s gas cylinder manufacturing.
Among the many challenges facing the project was that Bluedrop was in a pre-revenue stage in an incredibly competitive and highly regulated industry. However, J. Sassoon Group’s solution driven management approach compliments start-ups’ strengths while strengthening their weakness by utilizing its own global network. In addition to assisting with sourcing global engineering firms for the construction, J. Sassoon’s external consultants and accounting service firm, PriceWaterhouseCoopers (PWC), is providing consultancy and advisory services to the project.
Upon succeeding his grandfather as the chairman of the board, David E. Sassoon has taken a keen interest in Africa, continuing the family’s historical relationship with the continent, particularly South Africa. Bluedrop is the optimum start up to reengage the African market. David E. Sassoon personally mentored and guided Bluedrop through the complexity of the financing phase. The firm financially engineered the mezzanine finance deal to reduce borrowing costs in addition to a twelve-month payment holiday, enabling Bluedrop to accelerate growth and optimize success.
Mr Bruce Fein, J. Sassoon Group’s CEO explained that Bluedrop is the first pre-revenue start-up in Africa that J. Sassoon Group has invested in. “Our focus is on start-ups, entrepreneurs and midmarket companies. Bluedrop is the type of forward-facing, energetic company we are looking for. We are confident that this is a value accretive investment”.
Commenting on the transaction, Bluedrop’s Chief Financial Officer Mr Kenneth Maduna said, “As an independent 100% black owned company, we are ecstatic with the investment made by J. Sassoon Group more so for showing their confidence in us and South Africa as an investment destination.” Construction of the manufacturing plant is expected to commence in Q4 2021 and will take 12-14 months to complete.
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