PSG-controlled agri-business investor, Zeder Investments, is seeing early shoots of growth from its recent investment in seed marketing.
Last year Stellenbosch-based Zeder bumped up its stake in Agricol to 92% and also took a 49% interest in Klein Karoo Saad Bemarking (KKSB.) The two investments were then combined to form Zaad Holdings, in which Zeder holds an effective 92%. Zaad is headed by Antonie Jacobs, who interestingly headed Zeder in its formative years.
What is most surprising to CBN is the critical mass and profit levels already attained by the combined businesses – which Zeder values at a not insubstantial R369m. At a presentation at its recent AGM, Zeder reported that Zaad’s annual turnover was R610m with earnings coming in at R48m. The split at turnover level was R320m from KKSB and R290m from Agricol. Intriguingly KKSB’s larger turnover only yielded R17m in earnings, while Agricol posted a more sumptuous R31m.
The two companies do ply their trades in different markets. Oudtshoorn-based KKSB focuses its main bands Afrigro and K2 on the vegetable seed, pasture seed and agronomical seed for local and export markets. Agricol produces agronomical seed; pasture seed; lawn and turf seed as well as confectionary seed for human consumption.
Zeder reported the underlying performance of Zaad was still strong and that the company was evaluating additional opportunities. Zaad is already doing business across Africa, and it should be fascinating to see the extent of these cross-border forays, when Zeder reports its upcoming interim results to end August this year. In this regard it’s worth remembering that Zeder has already established a formidable African agricultural presence with its sprawling Chayton commercial farming venture in Zambia.
The total irrigated land capacity at Chayton has already reached 4,100 hectares and Zeder reckons the venture is on track to reach its targets. It’s early days in Zambia, but should success at Chayton spur Zeder to make more investments in commercial farming endeavours across Africa then Zaad would most certainly have a growing client base at hand.
By Jenni McCann