Investing in South Africa


Lonrho buys SA agri-distributor

21 July 2011

London-based conglomerate Lonrho has acquired Grindrod PCA, a leading exporter of fruit, vegetables and fish from southern Africa to the global market, from Grindrod South Africa for R50-million in cash.

The deal will make Lonrho the leading exporter of southern African agricultural produce to the global marketplace by air.

Grindrod PCA operates international standard cold store and logistics facilities in Johannesburg, Cape Town, Port Elizabeth and George. It has its headquarters at the OR Tambo International Airport outside Johannesburg, where it has facility of over 6 000 square meters with direct airside apron access.

The existing Grindrod PCA management team will continue to operate the business on a day-to-day basis as it is integrated with other Lonrho agri-logistics companies.

"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," Lonrho CEO David Lenigas said in a statement this week.

Increased demand from global retailers

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.

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 builds on Lonrho's established agri-logistics businesses, including adding further cold store capacity, improved access for more efficient handling of perishable goods and potential cost savings.

"The purchase of 100% of the Grindrod PCA business provides us with additional expertise to ensure we can meet customer requirements and the high fulfilment levels we target for our expanding agri-division," said Lenigas.

Opportunities for Africa

According to the McKinsey 2010 report, 60% of the world's arable land is in Africa, 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.

"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," Lenigas said.

SAinfo reporter

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Lonrho buys SA agri-distributor

London-based Lonrho has bought Grindrod South Africa's agri-logistics business for R50-million, to take advantage of opportunities in the export market (Photo: Grindrod)

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