Afgri heads back to poultry business | Business Day | Neels Blom | 18 October 2017

Agricultural investment company Afgri is re-entering the poultry business through its subsidiary Philafrica Foods in a 50-50 joint venture in northern Mozambique.

The recently launched Philafrica has earmarked up to R1.5bn for investment in agriculture and food processing in several African countries over the next 18 to 24 months. Its joint-venture partner in Mozambique, Novos Horizontes, is an integrated chicken producer focusing on smallholder production.

The partnership was the first of many such investments, Philafrica CEO Roland Decorvet said on Tuesday.

Afgri divested itself of its poultry interests in 2015, when it sold Afgri Poultry and Kinross Animal Feeds Mill to AfPo Consortium led by Matome Maponya Investments. At the time, Afgri said the sale would allow it to concentrate on its core grain businesses and orientate the company for growth.

The domestic poultry sector has been hit by a combination of cheap EU imports and an outbreak of a highly pathogenic strain of avian flu, putting thousands of jobs at risk. The EU has denied accusations of dumping unwanted cuts of chicken in SA, while Trade and Industry Minister Rob Davies has set up an interdepartmental task team to develop a rescue plan for the sector. The task team had not reported any findings a year after it was convened.

Decorvet said it was “important to note” that the company was re-entering the market in Mozambique and not in SA. “The company sees immense potential to replace imported products with local production in Mozambique and has secured a strong operating partner there with decades of experience in the poultry value chain.”

About 60% to 70% of the poultry consumed in Mozambique is imported.

The South African Poultry Association said in a report that the African market for poultry was expected to grow rapidly.

“What’s less certain is which countries will grow fastest and, more importantly, whether those countries will be able to develop and enforce trade policies that allow them to grow through their own production, rather than through imports from a range of potential countries,” it said.

The association’s interim CEO, Charlotte Nkuna, declined to comment on Afgri’s investment strategies.

Andrew Cunningham, the executive chairman of Novos Horizontes, said the partnership would help his company unlock its potential in Mozambique, where it intended becoming the premier poultry producer. It also planned to expand into other value chains where smallholder production could benefit from industrial agro-processing.

Decorvet said while there was a potential concern over further outbreaks of avian flu in Southern Africa, there had been no reported cases in Mozambique to date.

Source: Neels Blom, Business Day, 18 October 2017

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Mozambique poultry industry gets a boost from SA

A partnership between South Africa’s Philafrica Foods and Mozambique’s Novos Horizontes aimed to improve chicken production and supply in the coastal country.

Philafrica invested especially in locally sourced raw materials, while Novos Horizontes had provided inputs on credit to 250 smallholder broiler outgrowers, from which it purchased full-grown birds for slaughtering, processing, and marketing.

But, according to company’s website, production challenges had reduced smallholder numbers to 130.

Philafrica CEO, Roland Decorvet, said that currently 60% to 70% of Mozambique’s poultry demand had to be imported due to lack of local production.

“We see immense potential to replace imported [poultry] products with local production and are pleased to have found a strong operating partner in Mozambique with [nearly two] decades of experience in the poultry value-chain,” he said.

Andrew Cunningham, Novos Horizontes’ executive chairperson, said that with Philafrica’s support his company could continue working towards becoming Mozambique’s “premier poultry producer”.

Novos also wanted to expand into other value chains, where agro-industrial processing and building companies could pull production from Mozambique’s smallholder farmers.

A statement from Philafrica said it planned to invest between R1 billion to R1,5 billion in food categories across Africa over the next 18 to 24 months.

Source: Lloyd Phillips, Farmers Weekly, 17 October 2017

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Philafrica to spend up to ZAR 1.5bn on African food processing opportunities over next 24 months

Philafrica Foods, a South Africa-based food processing firm owned by agricultural services company Afgri, plans to spend about ZAR 1bn to ZAR 1.5bn (USD 73.5m to USD 110m) over the next 24 months on food processing opportunities in Africa, Chief Executive Officer Roland Decorvet said.

It is in the process of concluding a joint venture with a poultry producer in Northern Mozambique and the acquisition of a cassava processing company, also in Mozambique, he added.

Afgri decided to establish Philafrica as a focused vehicle for pursuing an aggressive growth strategy in Africa, said Afgri CEO Chris Venter. PhilAfrica will likely invest USD 100m in the next 18 months or so, Venter said.

Funding will come from equity contributions from its shareholders, said Decorvet. Afgri’s shareholders include Canadian investment holdings company Fairfax [FFH:TSE] and South Africa’s Public Investment Corporation (PIC).

Growth opportunities will comprise a mixture of acquisitions, joint ventures and greenfield projects in the food processing sector, said Decorvet, who previously held the position of CEO of Nestle [NESN:TSE] China.

The company plans to pursue roughly three to four opportunities per year as it looks to become a leading food processing company in Sub-Saharan Africa and will spend roughly USD 2m to USD 15m per opportunity, he said.

Philafrica will not concentrate on any specific food commodity or geographic market. “We are agnostic from a category or country point of view,” Decorvet said. Rather, its investment decisions will largely be informed by social impact potential, availability of strong local partners and profit, he added.

Social impact opportunities will include providing small-scale farmers with technical assistance, a route to market, and crop variety improvement.

Philafrica sees significant opportunity in being able to source locally grown food products that can replace imported products, said Decorvet. By way of example, in some markets there is significant opportunity to replace wheat imports with cassava products, he reasoned.

It currently holds 12 manufacturing plants in South Africa including maize mills, wheat mills, an oilseed extraction plant and animal feed manufacturing facilities.

Afgri was delisted from the JSE in 2014 following a takeover from Fairfax and the Public Investment Corporation. Afgri offers a range of agricultural services including grain management and storage, provision of equipment, financial solutions and retail services.

by Peter Cromberge

Source: Proprietary Intelligence

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Philafrica Foods partners with Novos Horizontes in Mozambique in move to transform small agribusiness in the poultry sector

Philafrica Foods (Pty) Ltd (“Philafrica Foods”), part of AFGRI Group Holdings, and one of the largest food processing companies in South Africa, has entered into a 50/50 joint venture with Novos Horizontes (“New Horizons”), an integrated chicken producer located in northern Mozambique. This forms part of Philafrica Foods’ planned investment of between R1 billion and R1.5 billion over the next 18-24 months in Africa.

With a focus on investing in food categories across Africa, and on locally-sourced raw materials, Philafrica is actively seeking investment opportunities on the continent, with Novos Horizontes being the first of many.

Novos Horizontes was founded in 2005 with a core vision of unlocking the potential – both in terms of labour and land – in Mozambique by supporting smallholder farmers in agribusiness. The joint venture with Philafrica Foods will allow the company to continue its expansion in that country.

“We saw in Novos Horizontes a trusted partner, a profitable business, and importantly, having the same values as us in terms of transforming the lives of smallholder farmers. Moreover, our expertise in rendering, feed mixing and poultry will drive substantial synergies as the company expands in Mozambique,” said Roland Decorvet, CEO of Philafrica Foods.

Decorvet adds that currently 60-70% of the poultry consumed in Mozambique is imported, and thus there is massive opportunity. “We there see immense potential to replace imported products with local production and are pleased to have found a strong operating partner in Mozambique with decades of experience in the poultry value chain.”

Andrew Cunningham, Executive Chairman of Novos Horizontes, stated: “We are excited by the potential of this investment and partnership to enhance our vision to unlock potential in Mozambique. We aim to be the premier poultry producer in the country and to expand into other value chains where agro-industrial processing and building brands can pull production from smallholder farmers.”

In addressing potential concerns pertaining to the current outbreak of avian flu, Decorvet said that while there have fortunately been no reported cases in Mozambique to date, the company is actively developing contingency and risk management plans.

Philafrica Foods is supported by the AFGRI Group, an investment holding company focused on food and agriculture with an underlying ethos as an enabler of food security in line with the Philafrica vision.

Source: Farmers Review Africa

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Nuwe rolspeler wil voedsel in Afrika verwerk

Aanvraag sal teen 2030 verdriedubbel

“Die vraag na voedsel in Afrika neem toe: Die mark vir voedsel en niealkoholiese drankies sal teen 2030 verdriedubbel en die middelklas sal van 123 miljoen tot meer as ’n miljard mense teen 2060 styg,” sê Roland Decorvet, uitvoerende hoof van Philafrica Food. Dié nuutgestigte maatskappy is deel van Afgri Group Holdings, ’n beleggingsmaatskappy met verskeie belange in ’n aantal landbouverwante maatskappye.

Philafrica Foods se hoofkantoor in Suid-Afrika bedryf onder meer mielie- en koringmeulens, ’n oliepers en veevoeraanlegte. Sy fokus is op beleggings in voedselontwikkeling in Afrika. Dit sluit die ontwikkeling van nuwe terreine en projekte vir voedselproduksie in. Die maatskappy wil ook strategiese verkrygings in lande soos die Ivoorkus, Ghana, Ethiopië, Kenia en Nigerië doen.

“Ons glo daar is ongelooflike geleenthede gegewe die robuuste vraag van verbruikers in Afrika asook van die internasionale markte,” sê Decorvet.

(https://d3rp5jatom3eyn.cloudfront.net/assets/image rolspeler-wil-voedsel-in-afrika-verwerk2017- 10-130.jpg)

Hy wys daarop dat Afrika suid van die Sahara oor miljoene hektaar landbougrond met hoë potensiaal beskik.
“Tog word minder as 10% daarvan bewerk en ons doelwit is om oor die volgende 25 jaar die transformasie van die

landbousektor van bestaansboerdery na ’n netto uitvoerder van voedsel te ondersteun.” Uitdagings

Een van die uitdagings om die landbousektor in Afrika te ontwikkel, is dat dit so moeilik is vir groot multinasionale maatskappye om onverwerkte landbouprodukte in die hande te kry.

“Ons rol is om hierdie toedrag van sake te verander en ons glo die doeltreffendste wyse is om vraag van die mark se kant te skep deur voedselverwerking op groot skaal aan te pak.”

Hy sê om dié doelwit te bereik, wil Philafrica Foods vertikale integrasie tot by die plaashek toepas.

“Ons werk nou saam met kleinskaalse boere om ’n groter verskeidenheid oeste te kweek, gee tegniese bystand en help hulle om op die hoogte te bly van die jongste markneigings en beste praktyke.”

In elke land word gekyk na maniere om ingevoerde landbouprodukte te vervang met produkte wat plaaslik verbou word.

Die maatskappy maak baie staat op die kundigheid en vermoë wat reeds in Suid-Afrika opgebou is, om ook beste praktyk elders te vestig.

In Suid-Afrika is hy betrokke by ontwikkelingsprojekte saam met kleinboere in KwaZulu-Natal en die Wes-Kaap.

“Ons kyk ook na vennootskappe met rolspelers in die verskaffingsketting wat ’n betroubare vennoot soek om na markte in Afrika uit te brei.” – Netwerk24

Source: Sakenuus – 13 October 2017

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Philafrica aims to become big food exporter

Afgri Group subsidiary plans to invest $50m-$100m in agricultural processing in sub-Saharan Africa

 

Philafrica Food, a recently launched subsidiary of agricultural investment holding company Afgri Group, says it plans to transform food processing in sub-Saharan Africa through investments of between $50m and $100m over the next 18 to 24 months.

 

CEO Roland Decorvet said on Tuesday Philafrica aimed to become a big food operator in Africa over the next 25 years in support of the continent’s transformation from subsistence agriculture to a food-secure net food exporter.

 

It intended building greenfield sites and strategic investments in at least 12 sub-Saharan countries. In SA, it operates grain and oilseed mills and manufactures animal feed.

 

The company has the full backing of Afgri, in which the Public Investment Corporation, Fairfax and Bafepi have substantial investments. Afgri already has a presence in sub-Saharan Africa, Mauritius and Western Australia. Afgri delisted from the JSE in 2013 in a R2.4bn buyout deal with private investment company AgriGroupe.

 

At the time, Afgri CEO Chris Venter said the partnership with AgriGroupe would strengthen its expansion in Africa. Decorvet said the robust and growing demand from African consumers and global markets, and Africa’s vast tracts of uncultivated arable land meant African agriculture provided an “incredible” opportunity.

 

Less than 10% of high-potential arable land in the region is under cultivation. More than 60% of the world’s uncultivated arable land is in Africa.

 

In its latest report released on Monday, the UN’s Food and Agriculture Organisation (FAO) said the growing demand for food in Africa’s urban areas had the potential “to transform rural economies and generate economic opportunities in off-farm, agriculture-related activities”.

 

This included each step of the supply chain as well as the supply of production inputs. “Already, growing demand coming from urban food markets consumed up to 70% of national food supplies, even in countries with large rural populations,” said FAO. It found that food production had to rise by at least 60% to meet demand created by the world’s 9-billion population forecast for 2050.

 

By 2030, said Decorvet, sub-Saharan Africa’s food and beverage market was likely to have tripled to $1-trillion, with the middle class projected to grow from 123-million people to more than a billion by 2060, making it the fastest-growing middle class in the world.

 

Mike Schussler of Economists.co.za said he was not surprised by the move. “Profit margins are low and South African companies are venturing out.” Quoting Reserve Bank statistics, he said offshore investment by SA at R2.9-trillion came to R1-trillion more than direct investment into SA at R1.9-trillion.

 

Schussler acknowledged the difficulties posed by country risk, but said conditions were changing. The liquor trade developed distribution logistics and other products were expected to follow their routes. “As it is, 5%-10% of SA-registered long-haul trucks are operating outside the country at any given time. That gives an idea of how things are changing.”

 

But the risks are real, especially because of poor infrastructure, said Bennie van Zyl, the GM at farmers’ union TAU.

 

“Many farmers who took a chance and invested in other African countries were badly burnt,” he said. “People don’t keep their promises. You can make money if you get in and out quickly, but a long-term investment is risky. And farming is a long-term investment.”

Source: Neels Blom, Businesslive.co.za

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