Tiger Brands’ hunger for Africa cannot be satisfied

  

South African fast-moving consumer goods company, Tiger Brands, has over the past few months made a number of acquisitions in the rest of the continent. The company’s expansion into Africa, however, shows no signs of slowing down as it yesterday announced another strategic investment.

Tiger Brands said that it has entered into an agreement to buy Davita, a South African manufacturer and exporter of powdered seasonings and beverage products with a presence in 28 countries across Africa and the Middle East.

Davita sells its products under three brands, namely Davita (premium powdered beverages), Jolly Jus (mass market powdered beverage offerings) and Benny (powdered seasonings). Davita showed an annual turnover of R567 million (US$77 million) for the financial year ended 28 February 2010, of which approximately 99% was from exports.

Tiger Brands will look to capitalise on Davita’s distribution network into the rest of Africa. “Davita has an established distribution footprint on the African continent, which will provide Tiger Brands’ export division with new growth vectors by leveraging off Davita’s solid distributor relationships and penetrating new geographies as well as deepening market penetration in existing markets,” the company said in a statement.

Tiger Brands, which has a broad portfolio of food, beverage and home & personal care (HPC) brands, recently clinched three deals in the rest of the continent. At the end of 2010, the company formed a partnership with UAC of Nigeria (UACN), a Nigerian diversified company. The joint venture will consist 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.

Last year Tiger Brands also signed an agreement with the East African Group of Companies of Ethiopia relating to the formation of a new food and HPC 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.

Peter Matlare, CEO of Tiger Brands, told Moneyweb in an interview last night that “countries such as Ethiopia, which people generally speaking write off as a basket case until they go there and they understand the economics of the place”, hold “real growth opportunities“.




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