BUSINESS LIVE / 23 OCTOBER 2018 - 18:41 / ALISTAIR ANDERSON
The home-grown cattle company will stay in South African hands while having major export potential, says the PIC
SA’s largest investor, the Public Investment Corporation (PIC) and Pelo Agricultural Ventures are set to buy a majority shareholding in Karan Beef for up to R5.2bn.
Ivor Karan, owner of Karan Beef at his farm in Balfour, Mpumalanga.
Picture: PUXLEY MAKGATHO
Karan Beef, which was founded more than 40 years ago, operates the largest cattle feedlot and abattoir on the continent.
The company was created in 1974 by the Karan family and is based in Heidelberg, Balfour and City Deep. It is solely owned by Ivor Karan. The feedlot accommodates 150,000 head of cattle at any given time. The Balfour-based abattoir has the capacity to process 2,100 herd of cattle every day.
Karan Beef agreed in September to pay a fine R2.7m after the Competition Commission found that the company had divided the beef market by allocating customers and specific types of goods in contravention of section 4(1)(b)(ii) of the Competition Act of 1998.
The company processes 2,040 head of cattle daily and debones up to 300 tonnes of meat a day.
SA is Karan’s biggest market, but also has a substantial export market, according to the PIC.
Apart from serving the South African market, Karan is also authorised to export to the UAE, Kuwait, Qatar, Bahrain, Oman, Jordan, Egypt, Mauritius, Seychelles, Maldives, China and Hong Kong.
PIC CEO, Daniel Matjila said the deal would lead to benefits for an array of South Africans including black farmers.
“This is a historic deal, concluded in terms of our client’s developmental investment mandate, which will support the much-needed transformation in the agricultural sector. It will bring new entrants into the sector at ownership level and will be instrumental in bringing emerging farmers into the value chain of beef production in SA,” he said.
“We are, particularly, happy that the Karan family has decided to sell part of this important asset to South Africans, ensuring that ownership remains local and in black control. This is a significant transaction and must be celebrated.”
The deal is subject to approval by SA’s competition authorities.
Pelo Agricultural Ventures is a black-owned, managed and controlled investment holding company that operates in the agricultural sector in SA and the rest of the continent.
“We are extremely proud to be part of this ground-breaking transaction and looking forward to working closely with the existing management team to grow the company”, said Pelo CEO, Aobakwe Kukama.
“This is a ground-breaking deal for agriculture in SA and we must celebrate the fact that the company will remain South African. We look forward to taking our new partners under our wings and sharing 45 years of knowledge and expertise with them”, said Ivor Karan.
The PIC did not reveal how much of the R5.2bn would be financed by itself, nor Pelo.
Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER