RCL Foods’s share price rose 3 percent after concluding a deal to acquire Sunshine Bakery Holdings, the company said yesterday
The value of the deal was not disclosed.
RCL Foods produces more than 30 leading local brands such as Rainbow chicken, Selati sugar, Supreme flour, Sunbake bread, Ouma rusks, and Number 1 mageu.
The share was at R10.69 in intraday trade, only rising 1.67 percent in three years amid several headwinds, such as rising input costs, the July unrest last year, and Avian flu-related costs.
The acquisition will increase bread volumes in the RCL Foods Baking network by 28 percent.
Sunshine Bakery was indirectly majority-owned by Afgri Group Holdings.
Established in 2005 by Daniel Anastasis, Sunshine Bakery, based in KwaZulu-Natal, is one of South Africa’s largest independent baking businesses. It serves a diversified customer base in the formal retail and general trade channels, through two regional bakeries in Durban and Pietermaritzburg, as well as various depots across the province.
“The acquisition is in line with RCL Foods’ strategy to scale the value-added brands component of its portfolio and to expand the capability of its established Baking business unit into new geographies,” the food manufacturer said.
In February the company delivered a 9.2 percent year-on-year increase in revenue to R17.1billion for the six months ended December 31, 2021.
At the time CEO Paul Cruickshank said RCL Foods was actively pursuing its strategic growth agenda with the aim of creating a focused and resilient value-added business that generates sustained shareholder value.
BUSINESS REPORT