Eight JSE-listed stocks that will give you exposure to the rest of Africa
Zeder is the agribusiness arm of South African investment company PSG.
Zeder was traditionally only focused on investments in the South African market, but has recently turned its attention to the rest of the continent. “We have always said that there are enough investment opportunities in South Africa at much lower risk. However, we have realised that we cannot afford to miss out on the vast opportunities that Africa present,” writes Zeder chairman Jannie Mouton in the company’s recent annual report.
A few months ago Zeder bought an 81% stake in Chayton Atlas Investments, a large-scale commercial farming operation in Zambia. Chayton has 1,250 hectares of irrigated farm land, which it plans to extend to over 10,000 hectares over the next two years. Initially the company will only produce crops for the local Zambian market, where it sees significant demand.
In addition Zeder has also acquired seed company Agricol (it previously only had a 25.1% shareholding). Zeder plans to use Agricol as a vehicle to drive a South African and an African expansion in the seed business.
“We will continue seeking and exploiting value enhancing opportunities within our core South African market and existing portfolio, while also evaluating investments in the sub-Saharan region,” notes Mouton.
4. Tiger Brands
Tiger Brands is a South African fast-moving consumer packaged goods company involved in a variety of products, including: bread, rice, pasta, peanut butter, candy and energy drinks, to name a few.
Over the past few years Tiger Brands has increased its footprint in the rest of Africa by buying stakes in businesses in countries such as Kenya, Cameroon, Nigeria and Ethiopia. At the end of 2010, the company formed a partnership with UAC of Nigeria (UACN), a Nigerian diversified company. The joint venture consists of UACN’s food and dairy operations as well as the SWAN water business. In addition it has bought Deli Foods Nigeria Limited, a company engaged in the manufacturing and marketing of biscuits for the Nigerian market.
Tiger Brands also signed an agreement with the East African Group of Companies of Ethiopia relating to the formation of a new food and home & personal care joint venture, which will operate in the Ethiopian market. “Ethiopia, which has a population of approximately 85 million, has experienced high GDP growth rates for a number of years. Most categories in the packaged consumer goods sector are enjoying good growth, stimulated by the fast growing economy,” the company said at the time of the announcement.
Last month Tiger Brands advised its shareholders that it is in discussions to buy a stake in Nigeria’s Dangote Flour Mills. However, since then no further details regarding the possible transaction have emerged.
5. Group Five
Group Five is a construction services, materials and infrastructure investment group operating in Africa, the Middle East and eastern Europe. The group has completed numerous projects in the rest of the continent. For example, Group Five has been involved in the building of a power plant in Nigeria and it is currently working on a new road in Zimbabwe. It has also completed projects in Africa’s mining industry.
Earlier this year Group Five CEO Mike Upton said that it is part of the company’s strategy to expand its operations in the rest of Africa. It is said that Africa needs around US$90 billion a year to deal with its infrastructure backlog. Group Five is well positioned to take advantage of these opportunities.
Upton recently told the Reuters Africa Investment Summit that he sees west Africa as a big growth market for Group Five. “West Africa for us is growing into a very viable broad-based market, not just a project opportunity region.” He added that the discovery of oil and gas in east Africa also holds potential for the business.View article on single page