22 February 2012
South African staple foods manufacturer Premier Foods has acquired a controlling stake in two Swaziland-based bread and confectionary businesses, Mr Bread and Swaziland United Bakeries, for R85-million.
The acquisition will give Premier Foods – which is known for brands such as Iwisa maize meal, Snowflake flour and Blue Ribbon bread – a major foothold in the market, as the two businesses it is buying command a 75% share of Swaziland’s bread market when combined.
In addition to gaining ownership of leading Swazi bread brand Supreme, Premier Foods also intends to introduce the Blue Ribbon brand, which is the company’s biggest bread brand in South Africa.
Transfer of technology, skills
“These acquisitions fit perfectly with our investment criteria and we look forward to working closely with the management team to develop high quality but affordable products for the Swazi market,” Premier Foods group CEO Ian Visser said in a statement this week.
Premier Foods will support the businesses technically and strategically to strengthen their market position. Wayne Levendale, currently MD of Mr Bread, will become CEO of the joint operations and will retain a major shareholding together with other key members of staff.
Levendale said that the investment would bring several benefits including much-needed access to expertise in terms of improved technology, product quality and transfer of skills.
“As a result, consumers can expect a better service through an improved delivery network and the introduction of new product ranges including high-end confectionary products at affordable prices,” he explained.
Levendale added that it was pleasing to see that Swaziland’s economic woes did not deter essential foreign direct investment that supports Swazi ownership.
Active sub-Saharan expansion
“Following our transaction with Brait last year, we are now in a position to carry-out our strategy to actively participate in new sub-Saharan markets where we can acquire and grow assets aligned with our existing products and operations,” said Visser.
In July last year, international investment group Brait increased its stake in Premier Foods to become a long-term strategic shareholder with a view to support Premier Foods’ next phase of growth.
This resulted in Premier Foods gaining improved access to capital for investments focused on the development of new products, capacity expansions and strategic mergers & acquisitions in new sub-Saharan markets.
Premier Foods has been operating, in one form or another, since 1852 and currently operates 10 bakeries, five wheat mills, one maize mill and 16 distribution depots nationwide, employing over 5 000 people in manufacturing, distribution and marketing operations.
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