Rhodes Food to buy Durban food producer Pakco

Rhodes Food Group, a South African food producing company, is planning to acquire Durban-based food producer Pakco for R200m ($14.5m).

Packo owns a wide range of brand portfolio including Bisto, Hinds, Buffalo, Southern Coating, Trotters, Gold Dish and Pakco.

Its products are sold by all major retailers and wholesalers in the domestic market, as well as exported to all the neighbouring African countries.

Rhodes Food Group chief executive officer Bruce Henderson said: “Pakco produces branded and private label ranges of spices, condiments, instant meals and desserts in dry packed, bottled and canned formats in its facility outside Durban.

“The acquisition is aligned with our strategy of expanding into adjacent product categories and will allow us to gain entry into the dry packed foods market.”

Packo will be the seventh food producing company acquired by a South African food producer, since it got listed on the Johannesburg Stock Exchange (JSE) in October 2014. Rhodes Food spent nearly R690m ($50.2m) for its acquisitions.

The company says that the acquisition is in line with its strategy to promote organic growth by acquiring food producers, which would help the company to expand its business into new and complementary product categories.

Henderson further added: “Our strategy is evident in the acquisition of Pacmar which was the catalyst for our entry into the fruit juice market while Boland Pulp facilitated our entry into the baby food market through the Squish brand.

“Similarly, the acquisitions of General Mills South Africa, which produces dry and frozen bakery products, and Alibaba Foods, which manufactures halaal Eastern foods, have strengthened our position in the bakery and snacking categories.

“Deemster has enabled Rhodes to enter the bottled salads and pickles market.”

The acquisition is subject to a due diligence process and competition approval, and is expected to be effective from 1 January next year.