Nompumelelo Magwaza
THE NEWLY listed food company, Rhodes Food, said on Friday that its acquisition trail would accelerate the group’s growth strategy of vertical integration as well as attracting investment.
Rhodes Foods is a fruit and vegetable canning company with production plants in Tulbagh and Swaziland. Since its listing on the JSE’s main board in October last year, the group has announced three acquisitions.
The latest acquisition announced on Friday was that of Boland Pulp for R102 million. News of this acquisition caused Rhodes’ shares to gain as much as 6.03 percent to close at R17.75.
Boland Pulp produces bulk fruit and vegetable juices and purées for the domestic and regional markets and also exports to more than 30 countries internationally.
Its sells purées, sauces and baby foods in re-sealable pouches under Pure Chef Ease, Pure Organic Mini Meals brands among others.
In its 2014 financial year, Boland Pulp generated revenue of R313m with earnings before interest, tax, depreciation and amortisation of R30m.
The group’s chief executive, Bruce Handerson, said on Friday that one of the aims of the Rhodes Food Group listing was to create financial capacity to pursue selective acquisitions to accelerate the group’s growth.
The group added the acquisition would also present an attractive investment opportunity which was aligned with the group’s strategy of expanding its business by means of vertical integration and lateral extension into product categories complementary to its current product ranges.
Rhodes Foods will also acquire immovable properties owned by Boland.
This is a strategic move which will result in pulp produced on those properties.
The Boland deal was subject to certain conditions, including the approval from the competition authorities.
Other acquisitions include the proposed buying out of Deemster, a vegetable canning and salad bottling business in Bethlehem for R10m. Deemster primarily co-packs products for third party brands and produces private label products for retail group including Pick n Pay, Spar and Woolworths.
Last month, the group announced its interest in acquiring a Western-based fruit juice manufacturer and distributor, Pacmar, for R165m.