Danish Crown enters South Africa through ESS-Food
"For several years we have enjoyed stable sales to South Africa. This prompted us to look at the possibility of entering the market for the sale and distribution of meat, which we now have acted on by acquiring a 70% stake in Overberg Food Distributors," explains Morten Holm, CEO of ESS-FOOD.
ESS-FOOD announced that Overberg Food Distribution's long-term strategy is mainly based on expanding its operations to cover the whole of South Africa
The company will act as the Danish Crown group's bridgehead on the continent, where the countries in West Africa are deemed to hold particular potential.
"It's important for Danish Crown as a group to create a strong foundation for future business on the African continent. In doing so, we’ll be able to benefit from the economic growth which is expected in Africa in the coming decades," says Jais Valeur, Group CEO of Danish Crown.
Overberg Food Distributors has 250 employees, and serves approximatively 2,000 customers, largely in the southern part of South Africa, from cold stores in Cape Town and Port Elizabeth. The company was founded 25 years ago, and today has revenues of nearly 350 million DKK (47 million euros) a year.
In the fiscal year 2015-2016, the Danish Crown group posted a revenue of nearly 600 million DKK (80.6 million euros) in Africa, which included sales by ESS-FOOD of 25,000 tons of meat at a value of 150 million DKK (20.15 million euros) on the South African market.
According to the group, ESS-FOOD will be responsible for selling all the Danish Crown's products in Africa, everything from Danish bacon and German Schweinshaxe, to Polish sausages and canned products from Tulip.
Overberg's founder and sole owner, Guy Osler, is retaining 30% of the shares and will carry on as CEO of the company.
The acquisition is subject to approval of the South African authorities.
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