Russians to Partner with CFI's Poultry Division10 May 2013
ZIMBABWE - Agro-industrial firm CFI is set for a rebound as it emerged that a new investor, a global company called Meat Team, will partner its poultry division, Suncrest in a joint venture that will change the company’s fortunes.
Meat Team is the trade name for a group of companies whose main activities are in the wholesale trade, distribution, import and export of meat, fish and other various food products. Sources told businessdigest it is owned by an unnamed Russian consortium.
According to Zimbabwe Independent, well-placed sources said that should the transaction sail through, the partners would form a 50-50 joint venture in which the new investors would match the already existing assets dollar for dollar. It’s also believed that businessman Ken Sharpe could be involved in the deal.
CFI has been looking for a lifeline as investors and new funding have been elusive for the past few years and analysts say the coming in of a strategic investor would dramatically change the company’s fortunes.
The group will be able to improve its capacity and expertise, which could result in a return to profitability.
CFI is expected to report its March results in the coming weeks.
At its last annual general meeting, CFI said it had strategic investors for both Victoria Foods and Suncrest, with CEO Steve Kuipa saying the company’s board had approved the offer received for its milling division and was seeking the regulatory and approval processes required by both the suitor and the authorities.
This comes after the company announced that Johannesburg Stock Exchange-listed firm Grindrod was expected to partner CFI in grain processor, Victoria Foods. Kuipa said the transaction (for the milling division) would require an EGM, owing to its size, scope and structure, whose date would be announced soon.
Kuipa said overall interest on investments in the agro-assets. Partners where the group needs to underpin investment and improve process efficiencies has been very subdued possibly due to complications caused by lack of security of tenure in agricultural land following the fast track land reforms.
“The poultry division transaction will help us address some of the bottlenecks and inefficiencies imposed by the aged infrastructure,” Kuipa said, adding that it was expected the transactions would be completed within the next couple of months.
Kuipa said CFI remained committed to a capital raise at the group level, which would combine an appropriate mix of equity and medium to long-term debt. However, these considerations will only be taken into fold once the subsidiary transactions had been concluded.
CFI’s 14 per cent stake in Windmill was still on the market while it expected to raise US$1,4 million from the disposal of a property in the retail division.
CFI operates three divisions: Poultry, Specialised and Retail. The poultry includes animal health unit Vetco, Agrifoods and Agrimix as well as Hubbard Zimbabwe, Glenara Estates, Crest Breeders and Suncrest Chickens.
Specialised Division comprises milling and snack-foods operation Victoria Foods.
The retail business of the group operates Farm & City branches around the country and the Town and Country stores, which the company was leasing out to the now defunct Afro Foods.ThePoultrySite News Desk