THE Co-op has successfully concluded the acquisition of Chicory SA with the unanimous approval of the shareholders of Chicory SA.
Aimed at enhancing its product offering to more farming disciplines in South Africa, The Co-op is proud to announce the addition to The Co-op Group. This follows an extensive period of research and negotiation, where after the offer to Chicory SA shareholders for 100% of the shareholding in the company, was accepted.
Chicory SA is a processor and marketer of chicory in South Africa and situated in Alexandria, Eastern Cape. Chicory SA, just like The Co-op, is owned and controlled by farmers.
The Board and Management of The Co-op believes that various strategic synergies exist between The Co-op and Chicory SA, which can unlock value for both entities. The involvement of The Co-op can also ensure the continued existence of the chicory industry in South Africa.
According to The Co-op Group CEO, Henk Agenbach, the addition of Chicory SA to the Group’s stable is a strategic decision to continue providing a comprehensive service to its producers.
“’By ensuring an offset for chicory, economic stability and growth will ensue for the chicory sector, which is of particular value during a time when drastic economic decline has occurred. It is a labour intensive industry that provides some income to people in very vulnerable rural areas,” he says.
Whilst the agricultural sector grew by 27.8% in the first quarter, from the last quarter of 2019 (after seasonal adjustment), according to the Agricultural Business Chamber, the total outlook of SA’s economy is feared to shrink by an estimated 7.2% this year.
This is regarded as even more reason to pool the resources of two pivotal agricultural businesses, as stability is required to bring about sustainable growth.
“Our business is owned by farmers and as a collective, we can maintain the profitability of our members through cost-effective service delivery and collective bargaining for quality products,” Agenbach says. “By including the chicory industry, the scope and reach of The Co-op are more diverse and effective. The Co-op is dependent on its members and is successful because of their participation and involvement. We support opportunities where our members can share their successes and learn from one another in the process.
“We also see that the growth of chicory has big potential in some of the rural areas as an attractive alternative to some of our developmental farming businesses.”
Chicory SA will continue to operate under its name.
