Acquisition of Grindrod PCA (7114K)
July 20 2011 - 2:00AM
UK Regulatory
TIDMLONR
RNS Number : 7114K
Lonrho PLC
20 July 2011
20 July 2011
Lonrho Plc
("Lonrho" or the "Company")
Lonrho Plc acquires Grindrod PCA and becomes the leading
exporter of Southern African agricultural produce to the global
marketplace by air.
Lonrho Plc ("Lonrho") is delighted to announce that it has
successfully completed the acquisition of the business of Grindrod
PCA from Grindrod (South Africa) (Pty) Ltd for a consideration of
ZAR 50 million (GBP4.5 million) in cash. The acquisition has been
unconditionally approved by the South African Competition
Committee. Grindrod (South Africa) (Pty) Ltd is a 74.99% held
subsidiary of Grindrod Limited.
Grindrod PCA, is a division of Grindrod (South Africa) (Pty)
Ltd, and is a leading exporter of fruit, vegetables and fish from
Southern Africa to the global market. It operates international
standard cold store and logistics facilities in Johannesburg, Cape
Town, Port Elizabeth and George. Its head office is at Johannesburg
International Airport, OR Tambo, where Grindrod PCA has a 6,419m(2)
facility with direct airside apron access.
Grindrod PCA is a member of IATA (International Air Transport
Association), AATA (Animal Air Transport Association), SAEPA (South
African Express Parcel Association) and also of GPLG (Global
Perishable Logistics Group).
The existing Grindrod PCA management team will continue to
operate the business on a day to day basis as it is integrated
with, and adds value, to other Lonrho agri-logistics companies
within the Lonrho Group. The management team at PCA bring an
in-depth knowledge of the South African logistics market and is led
by Mike Froy the current Divisional CEO who has been with Grindrod
PCA since 1993.
Lonrho is seeing increasing demand from global retail chains in
the USA, Europe and the Far East for fresh produce from Southern
Africa as retailers seek new sources of supply to meet increasing
global sales.
60% of the world's arable land is in Africa (McKinsey 2010), yet
only 10% of it is productive. There is growing demand from the
increasingly affluent one billion potential consumers in the
domestic African market and from the expanding export market for
opportunities for Africa to help to meet global demand.
Lonrho is already a leading player in the vertical integration
of the agriculture market where it plants, grows, packs and
delivers produce to the retail shelves in Africa and increasingly
across the world. The acquisition of Grindrod PCA will
significantly increase the logistic capabilities of Lonrho to meet
existing and forecast demand. The transaction will build on
Lonrho's established agri-logistics businesses. This will include
adding further cold store capacity, improved access for more
efficient handling of perishable goods and potential cost savings.
Grindrod PCA will deliver synergistic benefits to current Lonrho
businesses and the PCA management expertise is expected to deliver
increased order fulfillment ratios and improved customer
service.
Grindrod PCA reported turnover of ZAR 257m with gross assets of
ZAR 64m and PBT of ZAR 1.1m (after central management charges) as
at 31 Dec 2010 and has reported strong growth in revenues for the
first half of 2011.
David Lenigas, Lonrho Executive Chairman commented:
"This is a good strategic acquisition for Lonrho, making us the
largest distributor by air of fresh produce from Southern Africa to
the global marketplace in a sector we see as having strong growth
potential. The purchase of 100% of the Grindrod PCA business
provides us with additional expertise to ensure we can meet
customer requirements and the high fulfillment levels we target for
our expanding agri-division.
The opportunities for Africa to further develop its agricultural
output and supply produce to the booming African market and the
growing export market are significant and this acquisition places
Lonrho at the forefront of meeting this demand."
Enquiries
Lonrho Plc +44 (0) 20 7016 5105
David Lenigas
Geoffrey White
David Armstrong
Panmure Gordon +44 (0) 20 7459 3600
Tim Linacre
Dominic Morley
Adam Pollock
Hannah Woodley
Pelham Bell Pottinger +44 (0) 20 7861 3232
Charles Vivian
James MacFarlane
This information is provided by RNS
The company news service from the London Stock Exchange
END
ACQDMGZNKGNGMZG
Lonrho (LSE:LONR)
Historical Stock Chart
From Jun 2024 to Jul 2024
Lonrho (LSE:LONR)
Historical Stock Chart
From Jul 2023 to Jul 2024