Lonrho acquires Grindrod PCA for R50m

Grindrod PCA 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 the International Air Transport Association, Animal Air Transport Association, South African Express Parcel Association and also of 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," the company said.

It noted that 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.

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.

It said the acquisition of Grindrod PCA would significantly increase the logistic capabilities of Lonrho to meet existing and forecast demand.

The transaction would also 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 R257 million with gross assets of R64 million and profit before tax of 1.1 million rand after central management charges at end December 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."