| Tue 4 Nov 2003, 9:20 | | NATALAGRI BOARD SUPPORTS AFGRI BID |
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NATALAGRI BOARD SUPPORTS AFGRI BID
Afgri Limited
ISIN: ZAE000040549
JSE Share code: AFR
Agricultural services group Afgri has been announced as proposed buyer of Natal
Landbou Korporasie (trading as Natalagri), the KwaZulu-Natal-based agricultural
cooperative.
The board of Natalagri has signed an agreement with Afgri in support of its bid
to purchase the co-operative"s business, and the proposal will now be put to
Natalagri"s 1 000-plus members.
Natalagri, which has been trading in Northern KwaZulu-Natal for more than 70
years, generates annual turnover of about R1 billion. Its business includes 36
retail outlets, 360 000 tons of silo capacity, a 40 000 ton a year animal feed
factory, and a financing and insurance operation with a book value of close to
R200 million.
Afgri Requisites CEO Anton Visagie, says the transaction, if approved by
Natalagri members and the regulatory authorities, would complement Afgri"s
existing business by introducing 1 000-plus customers, and expand its
geographical footprint in KwaZulu-Natal. "There is very little overlap between
our retail networks, says Visagie. "Natalagri has a diverse range of farming
activities, from livestock to grain and sugar farming."
Natalagri"s animal feed business would be integrated with Afgri Animal Feeds,
the country"s third largest animal feed business. Visagie says the soya plant
would also be re-commissioned, with a capital injection and expertise.
Another benefit is that the Natalagri debtors" book, which would be funded by
Afgri Capital, is spread over different farming types, adding an element of
diversification to Afgri"s existing debtors" profile.
"This acquisition would provide Afgri with a ready-made entry to the KwaZulu
Natal region, something that would have taken years to establish as a start-up
operation," says Visagie.
Another advantage is that Natalagri"s silos are well positioned for imports and
exports, adds Visagie.
He also points out that the business models of both organisations are similar
and complementary.
Afgri"s proposes retaining the Natalagri name and brand, while causing minimal
disruption to existing management and staff of the cooperative. Management and
staff will be trained in the Afgri product range and performance requirements.
A Regional Advisory Forum chaired by an elected farmer representative will be
established to ensure smooth and regular communication between farmers and
management, while regular feedback to farmers will be maintained during the bid
process.
Afgri will take over the businesses of Natalagri and recapitalise them. All core
operations will remain intact.
Subject to member approval, paid-up share capital and member funds, together
with a premium, will be repaid to existing members.
"Our intention is to grow the business and extend our full range of products and
services, including our customer loyalty programme, to Natalagri members," says
Visagie. "We believe the Natalagri business has considerable potential for
growth which its current funding structure does not allow it to exploit. By
recapitalising the business, this growth potential can be realised. Natalagri"s
members will enjoy substantial benefits as part of the larger Afgri family."
Ends
ISSUED FOR : AFGRI OPERATIONS LIMITED
CONTACT : Anton Visagie, CEO Afgri Requisites: 012 460 3000 / 083 642 7316
FAX NO : 012 364 9037
E-MAIL : avisagie@afgri.co.za
WEBSITE : www.afgri.co.za
ISSUED BY : TISH STEWART PR ASSOCIATES
CONTACT : Tish Stewart 011 325 4195 / 082 443 6399
FAX NO : 011 325 4199
E-MAIL : tish@tspr.co.za
DATE : 03 November 2003
Date: 04/11/2003 07:24:02 AM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
