CTC investigates Innscor again
In spite of an earlier objection from the Competition and Tariff Commission, listed conglomerate Innscor Africa acquired a 29 percent stake in stock feed producer Profeeds. Innscor chief executive Toni Fourie told analysts recently that the group had acquired a stake in the company effective June 1, 2015 and had included it in the company’s results presentation saying it had recorded an increase in tonnage of 65 percent but a massive decline in the average selling price of 21 percent. CTC had previously blocked a proposed 59 percent acquisition of Profeeds by Innscor subsidiary, Irvines Zimbabwe following revelations that the deal would create a monopoly in the stock feed manufacturing sector.
CTC chairman Mr Dumisani Sibanda yesterday confirmed that the authority has started making some investigations in line with the transaction and has since been communicated to Innscor. “We have started making investigations on the transaction and we have written to them on the issue. We are now waiting to hear from them,” said Mr Sibanda.
The previously blocked transaction envisaged the acquisition of 59 percent of the issued share capital in Profeeds and Produtrade by Ashram, an investment vehicle jointly owned by Irvines Zimbabwe and Annunaki Investments Private limited.
Contacted for comment yesterday, Mr Fourie, however, was ignorant of the communication from CTC and declined to provide details with regard to the structure of the transaction.
“I have communicated with my colleagues and we are not aware of any communication or investigation from CTC. Therefore I am also not privy to disclose details of the transaction,” said Mr Fourie. However, it is widely believed that Innscor was already a shareholder in Profeeds before June 1 through its numerous investment vehicles but only transferred the company to its books recently.
Innscor Africa has a significant shareholding in National Foods, the largest stock feeds producer in Zimbabwe and in other companies operating at various stages in the poultry industry value chain. Authorities are of the argument that the possibility of Innscor having a stake in Natfoods and Profeeds will expose the stock feeds industry to a monopoly.
Profeeds was established in 2007 as a stock feed manufacturing plant and current production sits at over 6 000 metric tonnes of feed per month. The stock feeds manufacturer is renowned for producing the best performance chicken feed in the country and has partnered Zimbabwe’s largest chicken producer Irvines Zimbabwe where they are targeting small to medium size chicken farmers.
Profeeds, in line with the group’s growth strategy, has expanded significantly in the last few years by increasing its production capacity. The stock feed manufacturer this year commissioned additional storage and a new $6 million stock-feed plant to increase production three-fold, and capacity and storage five-fold.
The company also has plans to set up a fish feed manufacturing plant this year while plans are afoot to set up pig and cattle feed manufacturing lines.