Last round for McLachlan
CONTROL OF SOUTH AFRICA’S only “tequila maker” – Agave Distillers – has changed hands after the Graaff-Reinet-based group again failed to deliver on its promise to secure major profits from export contracts. In a terse email to Finweek, Agave CEO Keith McLachlan advised: “The McLachlan Family Trust, through its investment company Be-All Investments, sold its shares and loan account in Agave Distillers Ltd as of 1 November 2006 in order for me to pursue other interests.”
Finweek has established that a partnership headed by Jan Terblanche, CEO of venture capital fund-raising specialists Capital Commitments, has acquired the shares and loan account in Agave.
It’s not known how much the Terblanche partnership paid for the Be-All Investments holding – but it’s estimated that the combined stake held by Terblanche and Capital Commitments in Agave could top 65%.
McLachlan, a former Dimension Data executive, bought control of Agave – then trading as Reinet Distillers – in the late Nineties when the business had slipped into liquidation.
The business – one of the more prominent unlisted shares in SA – promised to generate serious revenue from distilling blue agava (a spirit very similar to tequila) from the surfeit of “garingbome” scattered around the Graaff-Reinet area.
Despite a worldwide shortage of tequila and strong international demand for the product, Agave couldn’t capitalise on export opportunities. Last year the group was raising fresh funding from the public – ironically, via Capital Commitments – to pursue new business opportunities in North America and other countries.
In the five years since 2000, Agave has generated a combined turnover of less than R8m, which yielded a combined loss of R10m over the same period. It seems clear that 2006 was another disappointing year for Agave.
However, Terblanche remains positive concerning the business. “We think this is a business capable of generating profits of R20m/ year. So far we’ve started to clean up the company and have taken down the overheads markedly.”
Terblanche says that Agave is a business with marginal input costs. “The raw product costs between R80 to R120/t…”
Positive about the prospects. Jan Terblanche