By Gbenga Agbana with agency report

Friday, 31 Dec 2010

 

The share price of UACN Plc rose by 44 kobo on Thursday, following plans by its core investor, Tiger Brands, a South African firm, to invest $375m in its operations.

The company’s share price rose by 44 kobo to close at N38 per share, as investors reacted to the development.

Tiger Brands will spend about 2.5 billion rand over the next five years to ramp up its capacity, according to Reuters.

”The company believes it will be necessary to invest domestically in excess of a further 2.5 billion rand in building capacity, so as to be able to meet demand,” the Chairman of Tiger Brands, Lex van Vught, said in the group annual report.

Tiger Brands, whose brands include Albany bread, Jungle Oats and Energade, said it was looking for expansion opportunities in fast-growing African markets and elsewhere, to offset slack demand at home.

”It is a fundamental principle of our strategy that growth is achieved organically in South Africa and by strategic acquisitions both within and outside South Africa,” the company’s Chief Executive Officer, Peter Matlare, said in the report.

Matlare added that discussions for potential acquisitions on the continent would continue.

In November, Tiger Brands said it had agreed to buy 49 per cent of the food business of Nigeria‘s UACN.

The South African-based company had also acquired Deli Foods Nigeria, an unlisted biscuit maker, and formed a joint venture with Ethiopia‘s East African Group to manufacture and sell personal goods and food.

Last month, Tiger Brands reported headline earnings per share of 1.39 rand for the year ended September, compared with 1.41 rand last year.

Shares in the group rose by 0.21 per cent at 193.50 rand by 1126 GMT, outpacing a 0.07 per cent weaker Johannesburg All-Share Index.

Source: Punch