Bokomo Botswana has applied to the Competition Authority for the approval of the acquisition of 50% of Irvine’s equity.
The desire to acquire the Irvine’s shareholding by Bokomo Botswana, according to Piet Van Wyk- the company’s Chief Executive Officer, is based on good business practices and to ensure that Botswana consumers continue to get superior value products.
Van Wyk says the merger opportunity presented itself when Irvine’s was required to expand its local production of day old broiler chicks as part of a directive from the Ministry of Agriculture (MoA) in 2011. “Essentially the MoA stopped the importation of day olds in a bid to encourage local production towards Botswana being self-sufficient in this sector.
Up to that point Irvine’s locally produced only 25% of the hatching eggs required for the production of its 200 000 day old broilers per week that it supplied to the local market with the balance of 75 % coming from South Africa.”
In order to maintain its market share of 45% and abide by the new MoA regulations Irvine’s needed to expand its Botswana operations. The estimated expansion value is said to be in the range of P28 million and Irvine’s felt it needed a technical and investment partner to raise these funds.
Bokomo is not new to the poultry sector with a current output of around 50 000 broilers per week out of its Richmark subsidiary. Bokomo is also the shareholder of Notwane Eggs which produces table eggs. The opportunity to purchase equity into the Irvine’s operation was based on a multitude of synergies between Bokomo and Irvine’s.
The potential partnership would bring to Botswana a P28 million investment, close to 40 new permanent jobs and most notably meeting the objective of the MoA to move Botswana closer to self sufficiency.
If the Competition Authority approves the transition, Managing Director Craig Irvine says, consumers in Botswana can expect greater value and quality from the products Irvine’s will produce locally: “Irvine’s brings to Botswana the Cobb 500 Broiler Breed via the investment of state of the art equipment.
This broiler is one of the most efficient breeds in the world with a large following in Europe, the USA and Brazil. The efficiencies of this bird will result in lower production cost which can only be good for the final consumer in the competitive environment we are in.”
For Bokomo Botswana the potential investment into Irvine’s further expands its production footprint in Botswana. Beyond just being an importer of goods, Bokomo has over the years invested heavily in Botswana to produce goods locally. Thus White Star Maize Meal, Pure Sugar Sukiri and Bokomo Flour amongst other products are now fully produced locally.
“We are more than just a distributor of great brands in Botswana. We are also a producer of proudly Botswana products,” Van Wyk said.