Agricultural services provider Afgri Limited has bought Pride Milling’s yellow maize milling business for R220 million, further consolidating its position in the country’s grain value chain.
Afgri CEO Chris Venter said the company has acquired three mills situated in Ermelo, Kinross and Bethal, which represented a 55% market share in South Africa’s yellow maize milling industry.
Venter added that the transaction has been approved by the Competition Tribunal and should take effect on 1 December.
“Purchasing the yellow maize milling operation is a strategic fit for Afgri, allowing us to strengthen our industrial food processing capability,” Venter said. “The acquisition enables instant production capacity and market penetration.”
The new operation will be called Afgri Milling. Jorrie Jordaan, Pride Milling’s CEO, will take over as its CEO. Afgri reported that the three yellow maize mills have a combined annual production capacity of 198 700t. “The acquisition includes the Gold Power trademark,” according to an Afgri statement.
Warren Jervis, head of small capitalised shares at Old Mutual Investment Group SA, explained that the acquisition was in line with Afgri’s move towards a focus on the grain value chain, as well as its goal of 60% exposure in the food market. “With the acquisition of the mills, Afgri will no longer only be sourcing and storing maize for farmers, but it will now also be able to mill the maize and supply it to food producers,” Jervis said. – Lloyd Phillips
