PIC buys into Africa's biggest feedlot in $365m deal
The Public Investment Corporation (PIC) and black economic empowerment group Pelo Agricultural Ventures agreed to pay as much as R5.2-billion ($365-million) for a majority stake in Karan Beef, which operates the continent’s largest cattle feedlot and abattoir.
Founded by the Karan family on their farm in 1974 with fewer than 100 head of cattle, the company now owns a herd of about 150 000 and has also purchased three adjoining farms, an abattoir processing 2 100 cattle daily, and a nearby distribution center. While it mainly supplies the local market, it also has substantial exports, according to an emailed statement from the PIC, which didn’t disclose the size of the stake.
Pelo Agricultural Ventures is a black-owned, managed and controlled investment holding company that operates in the agricultural sector in South Africa and the rest of the continent. South Africa’s government is pushing businesses to include more black participants to make up for discrimination during apartheid.
“It will bring new entrants into the sector at ownership level and will be instrumental in bringing emerging farmers into the value chain of beef production in South Africa,” PIC CEO Dan Matjila said in the statement. Pelo will work with Karan’s existing management to grow the company, CEO Aobakwe Kukama said.
The PIC manages more than R2-trillion on behalf of South African State workers’ pension funds.
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