[Cape Town, 16 November 2016] Pioneer Foods Group Limited announced today that it would acquire a 49.89% stake in major FMCG manufacturer Weetabix East Africa Limited for an undisclosed amount. This will establish a strategic beachhead for Pioneer Foods in East Africa and the opportunity to build a significant cereal position in the region.
The joint venture will see Pioneer Foods in partnership with Weetabix UK Limited. This will be the second JV between Pioneer Foods and Weetabix UK.
Founded about four decades ago, Weetabix East Africa produces the number one breakfast cereal in the region, with the Weetabix range enjoying a significant market share. The company currently exports to Tanzania, Uganda and Rwanda. The facility is well managed with highly trained staff, and has a recently upgraded plant with sufficient spare production capacity to support growth in the region.
Group CEO of Pioneer Foods Phil Roux said: “This acquisition represents a rare opportunity for Pioneer Foods to enter the East African market with a credible partner and a profitable branded business.”
“We believe there is strong category growth potential in this market, driven by an emerging middle class as well as by convenience-driven consumer trends. The per capita consumption of breakfast cereals in Kenya suggests good growth potential, with the added benefit of accelerating growth in neighbouring countries.”
Says Giles Turrell, Group CEO of Weetabix UK: “The business will provide a platform to introduce the wider Pioneer Foods basket, through an established and well developed route-to-market in Kenya and neighbouring countries."
The transaction is subject to Kenyan regulatory approvals, which is standard for a transaction of this nature.
About Pioneer Food Group Limited
Pioneer Foods is the second largest South African food and beverage manufacturer publicly listed on the Johannesburg Stock Exchange. The Group operates principally across Southern Africa, providing wholesale, retail and informal trade customers with a range of globally trusted, market leading brands. Pioneer Foods exports to more than 40 countries across the globe, with the growing international business representing a substantial proportion of the Group’s operating profit.
The Group operates a number of world-class production facilities producing a range of products that includes some of the most recognisable and best loved brands in South Africa and beyond, including Sasko, Bokomo, Weet-Bix, Liqui-Fruit, Ceres, Safari, Spekko, ProNutro and White Star. In addition, the Group has seven joint venture investments based in South Africa, notably, the Alpen Food Company SA, also a partnership with Weetabix UK Limited.
About The Weetabix UK Limited
Weetabix are the UK's number one selling, most trusted and most recommended cereal producer. Their Northamptonshire mills currently export to over 80 countries around the world, employing more than 1800 people world-wide. Weetabix Food Company is now majority owned by Bright Food (Group) Co. Ltd., one of the largest Chinese international conglomerates in the entire food industry.
The Weetabix Food Company has had ties with Weetabix East Africa since the first production of Weetabix in East Africa in the 1970s, through a partnership with the Manji family. Since then, Weetabix East Africa has seen rapid growth thanks to its strong local management team, and a product range expansion and significant capital investment in processing facilities. Weetabix in East Africa is now the most recognized cereal brand in Kenya and is poised for growth in the region.
Press contacts:
Weetabix UK Limited
Good Relations PR (UK), James Ralph: +44 (0) 20 7861 3030, weetabix@goodrelations.co.uk
Pioneer Foods Group Limited.
Leanne Koopman, Group Communications Manager: +27 (0)21 9744098, leanne.koopman@pioneerfoods.co.za