South Africa’s Pioneer Foods eyes acquisitions in five African countries

South African food and beverage company Pioneer Foods is considering acquisitions in at least five more African countries.

This decision follows the company’s recent acquisition of 50.1% of the shares in Nigerian competitor Food Concepts for $7m. Food Concepts operates quick-service restaurants and bakeries in Ghana and Nigeria, the largest economies in Africa.

Bloomberg quoted the company’s head of international business Thushen Govender as saying: "We’re talking to entrepreneurs for opportunities to expand our investments in the continent. Our focus is on larger economies with a higher population; for example, Angola, Kenya, Ethiopia, Tanzania and Ghana."

Governder said that the Food Concepts acquisition would help the company expand beyond South Africa.

Pioneer specialises in producing cereals, dried fruit products, baking ingredients, rusks, juices, eggs and condiments.

The group has three divisions. Essential Foods manufactures wheat and maize products, trades in rice, beans, lentils and dried vegetables, and has large bakery operations.

Groceries, previously called Bokomo Foods and The Ceres Beverages Company, produces cereals, rusks, biscuits, cake mixes, baking aids, instant mash potato, dried fruit products, nuts, spreads, dehydrated vegetables, processed salads, fruit juices, carbonated soft drinks and fruit concentrate mixture.

The company also has international joint ventures with Heinz Foods and Bowman Ingredients.

Pioneer will focus on acquiring existing African businesses, as starting completely new companies would take longer to deliver returns on investment.

"Our approach to investing in Africa is long term, [even if] over the short term there may be concerns. In the case of Nigeria, the exchange rate and growth level could be of concern because of the dependence of the economy on oil, [though] because of the younger population, we see a lot of opportunities," Govender said to Bloomberg.