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South African food companies continue expansion into rest of continent

South African food and agribusiness companies are continuing to look at growth opportunities in the rest of the continent.

Last year South African consumer goods giant Tiger Brands announced that it has bought a controlling stake in Dangote Flour Mills (DFM), one of Nigeria’s largest flour and pasta producers. DFM was started by Nigerian billionaire, and one of Africa’s richest men, Aliko Dangote. Over the past few years Tiger Brands has increased its footprint in the rest of Africa; in addition to Nigeria, it currently has operations in Cameroon, Ethiopia, Kenya and Zimbabwe.

This week another South African food company announced an investment in the rest of the continent. Rainbow Chicken, a producer of a range of poultry products and a supplier to fast-food outlets such as KFC, said it will buy a 49% shareholding in Zam Chick, a subsidiary of Zambian agribusiness firm Zambeef.

Zam Chick currently manages and operates Zambeef’s broiler (chickens bred and raised specifically for meat production) business, including a chicken abattoir and processing plant.

Zambeef CEO Francis Grogan said Rainbow would add value to the Zam Chick business, especially in the area of processed chicken products. In addition to fresh chicken, Rainbow currently produces a range of value added products such as chicken burgers and viennas.

Zambeef, which is listed on both the AIM market of the London Stock Exchange and the Lusaka bourse, is one of Zambia’s most celebrated companies. Zambeef is an integrated, farm-to fork company involved in the production, processing, distribution and retailing of beef, chicken, pork, milk, dairy products, eggs, edible oils, stock feed, flour and bread. The group is also in the process of rolling out its West Africa expansion in Nigeria and Ghana.

Rainbow is, however, not the only South African company interested in Zambia’s poultry industry. Astral Foods, a South African poultry producer, has been operating a poultry feed business in Zambia for many years. In June 2010, the company opened TigerChicks, a new state-of-the-art broiler breeding farm and hatchery in Zambia.

Although South Africa is the most advanced economy on the continent, its economic growth is relatively sluggish compared to other African countries. There is also an expectation that a growing middle class in the rest of the continent will drive an increasing demand for food products.

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