VENTURES AFRICA - Bunge Ltd. has announced that it intends to exercise its option to acquire a 50 percent stake in South African leading agribusiness company, Senwes Africa. The move comes as the duo look forward to further African expansion.
Bunge and Senwes entered into a joint-venture agreement almost a year ago, on 1st October 2011, in a bid to pool expertise and achieve greater growth across the countries of the South African Development Community (SADC). Both leaders in the agribusiness and food security sector, the pair hoped to expand business by focusing in the first phase of development on growing procurement and marketing through their joint wheat and grain import-export operations.
According to the partners, the join was advantageous for both parties, as Senwes would benefit from Bunge’s “expertise in international grain markets and risk management” while Bunge would rely on Senwes’ procurement prowess, and make use of the company’s extensive network of producer contacts around the region.
While the joint venture agreement of last year included a provision containing the option of Bunge acquiring a 50 percent stake in Senwes in order to allow for continuing Bunge investment, the option was not exercised until successful results started to filter through. The companies claim that the initial wheat and grain phase of expansion has seen satisfactory progress, prompting the renewed investment by Bunge as the pair decides on the next stages of the growth strategy. The value of the new acquisition was not, however, disclosed.
The joint venture, through Senwes’ African operations, already hosts operations in five of the fifteen SADC member states, namely: South Africa, Malawi, Zambia, Mozambique and Kenya, with imminent entry into the Zimbabwean market planned. In their announcement the pair underlined that they intend to speed up expansion into the remaining ten SADC countries in the next phase of their strategy.
Senwes Managing Director Francois Strydom indicated that the joint venture would broaden its focus to include other food products, such as soya beans, but that the end goal is to spread operations to other SADC countries and further. He stated: “We will be focusing on grains such as maize, wheat, soya beans within Sadc and gradually venture into the other economic regions of the continent”.
Meanwhile, the companies are continually considering new projects in which the pair might develop joint-ventures in the future. They recently decided to go ahead with the investigation of the feasibility of opening an oilseed-crushing plant in South Africa, potentially opening up a new market-dimension for farmers in the region.