AFGRI, a leading South African agricultural solutions and industrial foods company, together with the Public Investment Corporation (PIC) announced the sale of AFGRI Poultry and AFGRI’s Kinross Animal Feeds Mill to AFPO Consortium Proprietary Limited (AFPO), a Black Economic Empowerment consortium led by Matome Maponya Investments.
PIC funded the acquisition.
AFGRI Poultry has been renamed Daybreak Farms, and is now owned 54 percent by AFPO Consortium; 36 percent by the PIC on behalf of its clients, and 10 percent by employees and management.
Chris Venter, CEO of AFGRI, said: “AFGRI’s strategic vision is to drive food security across Africa. Our focus is to enhance AFGRI’s position in the grain value chain, and this transaction is another step toward that.”
He went on to elaborate that the divestiture is in line with a strategic decision to concentrate efforts on its core grain businesses and position the company for growth. “From a financial perspective the transaction enables AFGRI to reduce its gearing levels, fund priority businesses and reduce overall debt,” Venter said.
“AFGRI’s remaining foods and processing businesses are well aligned to grain commodities.”
The acquisition of Daybreak Farms by AFPO Consortium represents a landmark transaction for black ownership in the agriculture sector, and has created the first significant black owned enterprise in this sector. Daybreak Farms is a mature, well-established and integrated poultry business with critical mass and a fully capitalized infrastructure which the company says compares very favorably to South Africa’s other commercial suppliers of chicken. The company processes over a million birds per week, and the business includes the growing and processing of broilers into fresh as well as frozen whole birds, individually frozen birds and portions. The inclusion of established feed milling operations in the transaction ensures an integrated supply of specialist feeds for the process of growing chickens.
In addition, AFGRI Poultry sold some of its in-house farms to black farmers which increases supply from black farmers to over 20 percent. Mr. Kholofelo Maponya, the CEO of Daybreak Farms, said: “We are excited about this opportunity to participate in a critical sector such as poultry. We are, in particular, looking forward to contributing to food security here in South Africa while at the same time creating jobs in the communities in which we will be operating.”
“We are pleased with the transaction as AFPO will be a significant poultry producer in South Africa and will benefit from ownership of the Kinross Mill, both as a direct benefit to the poultry operation as well as having the ability to provide animal feed to third-parties,” Venter concluded.