Astral sells bakery stake for R96m
BusinessDay - Jun 1st 2012, 08:42
Poultry producer Astral Foods said yesterday it had sold its 50% stake in its bakery business for R96m to Fedoha Proprietary.
"The bakery is what we call an opportunistic acquisition," said Astral CEO Chris Schutte yesterday. "It didn’t form part (of us) then, and didn’t form part of our integration.
"We would have had to take the bakery to another level and make a large capital investment. It would almost require us to become hard-core bakers instead of poultry with a small baking interest," Mr Schutte said.
Astral’s sale of East Balt SA, which was a joint venture with East Balt of Africa, took effect on Wednesday and was due to the bakery’s operations not being "core to the activities of Astral Foods ". East Balt SA operates two industrial bakeries, in Gauteng and the Western Cape, producing primarily hamburger buns sold to fast-food outlets in SA.
Mr Schutte said Fedoha Proprietary was a group of individuals, some formerly involved in the food industry, looking to invest in the industry.
"This is their first acquisition. They are looking at more small, food-related companies."
On further possible sales, Mr Schutte said Astral would sell 25% of its 50% ownership in NuTec SA, a joint venture with Provimi, to Cargill, an international producer and marketer of food, and agricultural, financial and industrial products and services.
Mr Schutte said on the South African front, Astral Foods would be looking at increasing the performance of its Mountain Valley poultry processing abattoir in KwaZulu-Natal, acquired last year for R84,8m, which slaughters 135000 birds a week. "We have taken ownership of it about 10 months ago, and taken a strategic decision to double capacity to take it to 250000 birds slaughtered per week," Mr Schutte said.
Last month, Astral reported its revenue rose 16% to R4,9bn for the six months ended March, but operating profit fell 14% to R324m due to a steep increase in feed costs. Its diluted headline earnings per share fell 17% to R5,23. The group grew its interim dividend 10% to R3,36.
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