A leading French company, Lesaffre, is on the verge of acquiring a 60% equity in Zimbabwe’s sole yeast producer Anchor Yeast for about US$9 million, sources close to the deal revealed this week.
According to the sources, Lesaffre is keen on acquiring the 60% equity and then recapitalise the business to the tune of US$3 million.
Lesaffre is a family-run group founded in the north of France that has become a leading global player in the yeast and fermentation business.
Anchor yeast MD Mike Nyabadza confirmed the company was working on the transaction but would not be drawn into giving specifics.
“We are very close to finalising the transaction. We are expecting to close the transaction in two to three months,” Nyabadza said.
Should the transaction go through, Nyabadza said Anchor Yeast would benefit from Lesaffre’s research and development experience.
“Yeast is a living organism and demands a lot of research and development and this relationship would be a good opportunity for us,” he said.
With €1,6 billion in turnover, Lesaffre employs a staff of 8 000 divided between more than 80 subsidiaries in some 40 countries. The company’s products are sold in more than 180 countries.
From family-owned factory to international group, Lesaffre has built and strengthened itself, by passing on expertise that is grows from generation to generation, and continuously revitalising its capacity for innovation.
Nyabadza said Anchor Yeast was currently producing 6 000 tonnes annually. He said post the transaction, the company was hoping to produce 10 000 tonnes and grow the figure going forward.
Nyabadza said the transaction would put them in a dominant position in the region, adding this would open up the the Comesa market.
“The transaction takes us from being of service to just 14 million people to being of service to a broader Comesa region,” he said.
Anchor Holdings, the parent company of Gweru-based Anchor Yeast, last year lobbied parliament for a three-year ban on imports in a bid to save the business from collapse.
Company chief operating officer Muvirimi Kupara then told a parliamentary portfolio on industry and commerce that such protectionist measures would help the company raise US$4,5 million internally to retool within the subsequent 36 months.
“We have laid off 46 staff within the last nine months and at the rate that we are importing, we will eventually shut down because the economics of the situation do not make business sense anymore,” Kupara said at the time.
“But Zimbabwe has more than enough consumer demand for us to remain viable and even beyond competitive. We ask that we be protected for 36 months. The 36 months will give us capacity to retool our plant and match global standards.”
Anchor Holdings was losing US$3 million in turnover per annum because of competition from imports from Zambia and South Africa.
The company, which currently employs 101 employees, has been in existence since 1956.
Zimbabwe requires 5 400 tonnes of yeast per annum. Anchor has installed capacity to produce 7 000 tonnes but was operating at 60%.
The company supplies yeast to baking, brewery and ethanol industries.
The acquisition of new equipment was supposed to increase the company’s annual production to 10 000 tonnes and enable it to export.