| Wed 20 Jul 2011, 8:00 | | LAF - Lonrho Plc - Lonrho Plc acquires Grindrod PCA and becomes the leading |
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LAF
LOLAF
LAF - Lonrho Plc - Lonrho Plc acquires Grindrod PCA and becomes the leading
exporter of Southern African Agricultural produce to the global marketplace by
air
Lonrho Plc
(Incorporated and registered in England and Wales)
(Registration number 2805337)
(Share code: LAF ISIN number: GB0002568813)
("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 6,419m2 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
20 July 2011
South African sponsor
Java Capital
Date: 20/07/2011 08:00:15 Produced by the JSE SENS Department.
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