Johannesburg - RCL Foods has expanded into Uganda by buying 33.5% of a poultry producer, it said on Friday.
RCL, which plays in the fast-moving consumer goods space, says it will spend R58.9 million in cash to buy just more than a third of HMH.
The listed foods company is a subsidiary of Remgro and owns four principal operating subsidiaries. These are Foodcorp, TSB Sugar RSA, Rainbow Farms and Vector Logistics.
RCL was previously known as Rainbow Chicken but, on August 16, 2013, it changed its name after buying Foodcorp, South Africa’s third largest food producer.
RCL Foods has also partnered with Zambia’s Zambeef Products around its chicken broiler business and establishing a broiler parent stock rearing, laying and hatching operation, Zamhatch.
In the six months to December, it grew revenue 38.8% to R12 billion, largely due to the inclusion of six months of TSB’s results, which it bought last year, and improved performance by Rainbow.
RCL Foods’ headline earnings before interest, tax, depreciation and amortisation gained 73.7% from R688.3 million to R1 195.5 million and its associated margin grew from 7.9% to 9.9%.
In a statement, it explains HMH is a poultry producer operating a feed mill, broiler farms and processing plant.
It is currently owned by the Hudani and Manji families, who have extensive interests in East Africa in food processing, distribution, construction, telecoms, real estate and hospitality.
“This is an exciting opportunity to enter the East African region with an established reputable partner, and the new venture will create one of the largest processors and marketers of chicken in both Uganda and East Africa,” says RCL.
The deal is not subject to any material conditions.