NewsNorth AfricaTop 500 Companies: Growing pains for some but not for others

Fri,24Nov2017

Posted on Friday, 25 March 2016 13:54

Top 500 Companies: Growing pains for some but not for others

By Charlie Hamilton

Bidvest remains the giant of the sector, expanding its exports to Asia and Europe, while the competition bites into the sugar pie.

Weather extremes played havoc with Africa's agri­cultural output in 2014, with revenue earned by the agri-business firms in our Top 500 companies dropping by 11.2% year on year.

The 44 agribusiness companies that feature in this year's ranking brought in revenue worth $37.7bn and profits worth $2.2bn in 2014. Combined with the food and drink sector, this revenue rises to $58.6bn, totalling 8.4% of revenue gathered by our Top 500 companies.

Similar results could be expected for companies' 2015 results due to droughts in places such as South Africa and Ethiopia.

Top 10 Agribusiness companies 

South Africa's Bidvest Foods (#10) crept up one place in our rankings and continues to stand head and shoulders above its rivals in terms of turnover, generating $8.8bn – 11% more than in 2013. However, in terms of profits Algeria's Cevital (#46), took the number one slot, netting $347.1m, compared to Bidvest's $272.7m.

Bidvest bucked the African agri­cultural trend by expanding thanks to its exports to key markets in Asia and Europe, which buy around half of its output. Growth in the firm's international food services busi­ness expanded by 25%, masking the more modest 4% growth in its South African divisions.

Meanwhile, foreign companies are creating demand in African agribusiness supply chains. "One of our concerns is how we source our materials", says David Cutter, president of global supply and procurement for drinks giant
Diageo. "This is essential to stay competitive and avoid the fluc­tuations in African currencies. Today, 70% of our materials are sourced within our markets and our goal is to go up to 80%."

Monopoly down

Despite having the highest profits in the sector, Cevital dropped two places in our ranking. The firm also lost its monopoly over sugar refining in Algeria, with news in December 2015 that a new refinery run by France's Cristal Union and Algerian company La Belle had be­gun operations in Ouled Moussa.

The new competitor aims to hit output of some 700,000tn in the coming months, which will ser­iously threaten Cevital's market share in a country that consumes around 1.2m tonnes per annum.

South Africa's largest food producer, Tiger Brands (#54), climbed six places. The news is sure to delight shareholders nearly as much as the Decem­ber announcement that it would sell its 67% stake in loss­making Tiger Branded Consumer Goods – formerly known as Dangote Flour Mills –to Nigeria's Dangote Indus­tries. Investors were shaken by the announcement in September that chief executive Peter Matlare was to quit at the end of 2015.

Elsewhere, South Africa­based Pioneer Foods (#101) has bought a majority share in Nigeria's Food Concepts in early 2015 and plans a wider African expansion. ●



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