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July 14, 2020

Fresh investment in South Africa’s Quantum Foods

South Africa-based poultry processor Quantum Foods has revealed two separate entities will acquire stakes in the business.

By Dean Best

South Africa’s Quantum Foods has revealed two separate entities will acquire stakes in the business after the poultry and eggs producer last week flagged potential interest from the market.

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The food and grocery sector thrived during the pandemic, largely due to the shutdown of the food service industry and the sector’s subsequent necessity, panic-induced bulk purchasing, and spending more time at home. The market has grown as a result of inflation. Consumer unwillingness to go out and socialize, and the reopening of several hospitality facilities, helped maintain the demand for groceries, particularly online, in 2021. As consumer behavior changes, we consume more food and drink at home, and inflation increases basket sizes. GlobalData predicts that the sector will continue to hold a higher share than had been predicted prior to the pandemic. This is true despite the fact that the food and grocery sector's share of overall retail will decline from its peak in 2020. This report will discuss market forecasts and key themes in the global food & grocery industry in 2022 and beyond. It covers:
  • Market drivers and inhibitors
  • Five-year forecasts and the impact of COVID-19
  • The performance of the online channel versus offline
  • Major trends in the market including rapid delivery, ambient retailing, supply chain disruption, and inflation
Assess developments within this sector to help your business thrive in 2022 and beyond.
by GlobalData
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Silverlands II, an investment fund operating out of Luxembourg and run by London-based SilverStreet Capital, has “entered into binding agreements with certain institutional shareholders” to acquire 32% of the business, Johannesburg-listed Quantum Foods said in a stock-exchange filing on Friday (10 July).

The transaction – for a maximum of six South African cents a share – was spearheaded by Silverlands’ wholly-owned subsidiary Aristotle Africa Sarl. Both Silverlands and SilverStreet are “long-term investors” in Quantum, the poultry processor said.

Quantum said the deal is expected to close sometime next week.

And today (14 July), Astral Foods, another South Africa-based poultry producer, said it had acquired a 6.4% stake in Quantum to secure the supply of broilers amid concern its existing contract with the company might be put at risk. 

“Following a material change in the shareholding of Quantum, Astral has been concerned that its current broiler supply agreement with the company could be jeopardised over the long term,” Astral, based in Centurion in Gauteng province, said in a statement. 

The new holdings in Quantum follow the purchase in June of a 32.1% share of the business by local poultry processor Country Bird Holdings, which acquired the stake from Zeder Investments. 

Quantum, meanwhile, supplies around 30% of Astral’s live broiler chickens processed in the Western Cape. That equates to about 12% of the total broilers being slaughtered by Astral. 

“If there is to be a change in control of Quantum, it could adversely impact the broiler supply agreement with them, and Astral would most probably have to consider a significant investment in broiler production capacity to ensure the continued supply of live broiler chickens to its County Fair operation in the Western Cape,” Astral noted.

Chris Schutte, Astral’s CEO, added: “The rationale for Astral acquiring a minority stake in Quantum was to ensure that Astral’s current arms-length medium- to long-term supply agreement with them remains intact.”

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Free Report
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What’s the forecast for the food and grocery industry?

The food and grocery sector thrived during the pandemic, largely due to the shutdown of the food service industry and the sector’s subsequent necessity, panic-induced bulk purchasing, and spending more time at home. The market has grown as a result of inflation. Consumer unwillingness to go out and socialize, and the reopening of several hospitality facilities, helped maintain the demand for groceries, particularly online, in 2021. As consumer behavior changes, we consume more food and drink at home, and inflation increases basket sizes. GlobalData predicts that the sector will continue to hold a higher share than had been predicted prior to the pandemic. This is true despite the fact that the food and grocery sector's share of overall retail will decline from its peak in 2020. This report will discuss market forecasts and key themes in the global food & grocery industry in 2022 and beyond. It covers:
  • Market drivers and inhibitors
  • Five-year forecasts and the impact of COVID-19
  • The performance of the online channel versus offline
  • Major trends in the market including rapid delivery, ambient retailing, supply chain disruption, and inflation
Assess developments within this sector to help your business thrive in 2022 and beyond.
by GlobalData
Enter your details here to receive your free Report.

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