AECI CEO Mark Dytor
Photo by: Duane Daws
South African chemicals group AECI has entered into an agreement to acquire Southern Canned Products (SCP) for an undisclosed amount, complementing its Lake Foods division and its strategy to grow its Food Additives and Ingredients business in South Africa and, ultimately, the rest of Africa.
“Although Lake Foods and SCP are primarily focused on the South African market, they have representation in [other] parts of the continent. Moving forward, we plan to optimise synergies and leverage AECI’s extensive African footprint to diversify the businesses,” AECI CEO Mark Dytor explained in a statement on Tuesday.
This ability was “very important” in geographies where several of the JSE-listed company’s major customers were putting down roots, attempting to unlock the commercial opportunity of the above-average economic growth in emerging markets.
In line with AECI’s commitment to delivering added value, SCP supported its customers throughout the product development life cycle, with capacity in research and development – analytical, sensory and technical – manufacturing, packaging and logistics.
“Consumers want more appetite appeal, choice, flavour and texture, and we’re committed to providing products that meet these increasingly complex requirements,” added Lake Foods chairperson and AECI chemical cluster executive Dean Murray.
As such, AECI was looking at food additive and ingredient manufacturers that had a deep customer service culture and proprietary intellectual property. “SCP ticked all the boxes in this regard,” Murray highlighted.
A manufacturer and distributor of juice-based drinks and products, SCP generated revenue of R520-million in its last financial year and was expected to enhance the food additives and ingredients business’s offering to the beverage industry in particular.
SCP was founded more than 50 years ago and, in 2005, private equity investment company Gerber Goldschmidt South Africa and the management of SCP entered into an equal partnership.
The company has a Cape-Town based manufacturing facility, which is hazard analysis and critical control points and International Organization for Standardization accredited.
SCP comprises three divisions, namely, trading, specialised and formulated juices and brand.
The trading division boasts contracts with established local companies to source, import and manage the logistics of their juice concentrate requirements.
The specialised and formulated juices division is focused on in-house intellectual property in the formulation and manufacture of specific juice concentrate products for local and international beverage customers.
The brand division bottles olive and seed oils, marketed under the Olive Pride brand.
Lake Foods is the exclusive representative for international manufacturers and suppliers of specialty ingredients and commodities, offering products and services to the bakery, beverage, dairy, health and nutrition, meat, poultry and wine industries. Its products include bacterial cultures, enzymes, natural colours, test systems, phosphates, stabilisers, emulsifiers, baking powders, brines, spice blends and marinades.
AECI’s acquisition of SCP from Gerber Goldschmidt South Africa and SCP management is subject to a number of conditions precedent, including approval by the Competition Commission of South Africa.