Grindrod breaks into commodity trading

May 26, 2005
Author: P&S

Durban-based Grindrod Group is becoming something of a newsman’s dream – every week or so seems to bring stories of a new ship or another takeover or acquisition.

The latest headline catching news announced this week is Grindrod’s purchase of the external commodity trading and shipping operations of Kansas-based (USA) Seaboard Corporation.

Seaboard’s operations were acquired as a going concern, with about 30 of the staff transferring over to the renamed Atlas Trading & Shipping. About ten of the staff are based in South Africa and the balance work in the United States.

The business operates out of Bermuda and South Africa and is a major trader and supplier of agricultural commodities worldwide.

Ivan Clark, Grindrod’s managing director said that as far as customers and suppliers are concerned it remains business as usual. The purchase is part of Grindrod’s promised diversification of its many business interests.

“The group plans to grow its commodity trading activities through this acquisition and other avenues. It is really exciting to buy into businesses which are complementary to our shipping and logistics operations but provide us with a far broader base of diverse activities.”

Clark declined to say what the deal has cost Grindrod but Seaboard revealed that the annual revenue of the section acquired amounted to US0 million in 2004 and was 0M for the first quarter of 2005. Operating profit for the first quarter of 2005 was approximately .8M.

Earlier this month Grindrod announced it had bought a 50% share in Port Elizabeth-based Sheltham Locomotive and Rail Services (see Ports & Ships News report dated 16 May 2005). Other landside acquisitions this year include Uniroute Logistics (News report, 14 February 2005), bulk terminals at Walvis Bay and Maputo (News report, 9 February 2005), and the furniture removal company Boltt Removals.

And the takeover trail won’t end with Seaboard. Clark revealed that so far only about R300 million from a kitty of R1 Billion intended for landside operations has been spent, and said other acquisitions can be anticipated during this year.

At yesterday’s AGM held in Durban, Grindrod chairman Murray Grindrod told shareholders to expect between 50% and 60% increases in headline earnings for the six months this year to June.

In a statement Seaboard said the sale of this portion of its business to Grindrod would enable Seaboard to focus on its core milling operations and the efficient supply of commodities in support of these operations.

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