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Profert in the News - Pro Newsflash - Press Release 

Pro Newsflash - Press Release 

12 May 2014

The Profert group is a well diversified company with Agriculture at its core business with a turnover of R6,5bn this year. It offers a basket of goods to farmers (fertiliser, finance, Insurance, animal feeds, veterinary supplies, lime, machinery and equipment etc). The company how ever views its participation in the agricultural market beyond the farm itself, indeed, from 'farm to fork' as it adds value to agricultural produce and moves it through to the supermarket shelf.

Our long-time investment partner, Sanlam Private Equity (SPE), adivision of Sanlam Life Limited, has decided to exit the business in keeping with its investment mandate and horizon. In consequence Profert has, over the past eighteen months, been in search of a suitable replacement. In so doing we have been looking for a strategic partner with an interest in our business beyond that of pure equity player with an exit horizon. We have been looking for an investor with a bullish view on food production as well as backward integration in the future and who desires to grow our business aggressively on a global scale.

In RuiXing, the biggest privately owned fertiliser manufacturer in China, with an entrepreneurial characteristic similar to ourselves we have found such an (investor) partner. Whilst our diversification investments to date have focussed on forward integration from the farm to the supermarket shelf, the well developed technology within RuiXing will enable backward integration into the fertiliser manufacturing process in the manufacture of nitrogen from coal. Indeed, we are excited at the prospect of leading the way in changing South Africa from a net importer of fertiliser to a net exporter of nitrogen in particular.

The Profert of today is an importer and distributor of fertiliser (inter alia, urea as a nitrogen source) with dedicated suppliers and a well established logistic network from vessel to port and from port to farm. It has acquired Vrystaat Mielies which finances farmers and markets their product. We produce and distribute veterinary supplies, manufacture animal feed, and have a comprehensive basket of consumer goods including bacon, candles and pet food (all of which we manufacture ourselves) as well as numerous other products which we market, distribute and merchandise on an agency basis.

The Profert of the future, with its new partner RuiXing will backward integrate into nitrogen and explosives manufacture for Africa and the world. RuiXing group have refined the art of production of nitrogen from coal at internationally competitive prices. They have the desire to expand their production into Africa and to further diversify its business base throughout the food value chain.

Their chairman, Mr Meng Guangyin is a well respected business man, a professor at the Xangdong Agricultural University and a strategic thinker who has taken the decision that his company purchase a 55% share in the Profert group. Profert share-holders have accepted the offer as RuiXing will bring much needed capital and expertise to the table which is required to expand Proferts business to its full potential.

Good news for South Africa and agriculture in general is that RuiXing and Profert have decided to immediately proceed in the establishment of a coal to nitrogen conversion plant for the manufacture of urea and related products as well as explosives. Starch and glucose manufacture are core competencies of the RuiXing group and, as such, similar plants are also on the cards in completing the agricultural value chain in South Africa.

Trade, both import and export, with China is likely to explode, especially on agricultural goods. Existing Profert portside infrastructure shall be upgraded to accommodate these increased volumes. Prospects for a joint IPO present themselves as together we create critical mass for investors. The RuiXing group and the Profert group, once combined will have a turnover in excess of R16bn per annum and an asset value in excess of R10bn.

The deal has been sealed at an official signing ceremony held at Emperors Palace on 23rd October. The special guest of honour who flew in from China to witness the ceremony was Mr Li, Chief Senator of Taian City of the Xangdong province.

Pro Newsflash - Press Release 162.6kB