NATIONAL Foods Holdings (Natfoods) has moved its 60 depots countrywide into a wholesale run by the group’s former executives, a company official has said.
By Chris Muronzi
Natfoods CE Mike Lashbrook told businessdigest in the capital last week his group was moving its 60 depots out of the milling and food giant.
“We have done a transaction to get our depots out of National Foods. A total 60 depots have been moved into an entity called Gain Cash & Carry,” he said.
This will see Natfoods, which has traditionally used the depots to stock its own products, stock a wider array of products.
“They (the former executives) will be setting up a fully-fledged wholesale group countrywide,” Lashbrook said. “We feel that our core business is manufacturing. As we grow, we don’t want to be walking the same road as our customers.”
Gain Cash & Carry is going to be led by two former senior Natfoods executives.
Former Natfoods FD Liberty Murimwa and former sales and distribution director Johnson Gapu are running the venture.
With 60 depots dotted countrywide, Gain Cash & Carry has effectively hit the ground running by utilising the already existing branch network. Under the deal, Gain Cash & Carry will have a five-year lease.
Lashbrook said his company still has a healthy acquisition appetite, hinting there is a transaction the group is working on involving a possible merger.
A transaction that could result in a possible merger with Profeeds, a stockfeed line, Lashbrook said, was awaiting approval from the Competition and Tariff Commission.
The company this year acquired a 40% equity stake in Pure Oil, an oil processing company.
Lashbrook said the company is looking at investing in margarine production.
“We are at feasibility stage; so we have not finalised on the costs,” he said.
Natfoods also acquired Breath Away which manufactures snacks and biscuits.
“At the moment, we are just producing Iris biscuits,” Lashbrook said.
At Breath Away, he said, Natfoods want to extend the company’s portfolio of products.
Lashbrook added that the company was looking at venturing into the region in the next three years.
Asked whether the company was looking at acquisitions in the region, the Natfoods boss said it was still early days.
“In terms of the region, I think it’s still early days. Ideally, we would like to get in there with a product I know,” Lashbrook said. “If you look at the share price, there has been an upward movement in the last couple of months.
But Lashbrook felt the share price was not an actual reflection of the current value of the company.
Natfoods closed at 360 US cents and had a market capitalisation of US$246 million on Wednesday.
“It has not been reflective of the company’s value,” he said. “Our profit after tax was up 10% last year, yet there was no movement of the share price.”
He would not be drawn into commenting further, saying he was in a closed period and could not make statements that could have an influence on the share price.