Cautious Zeder sits on R1bn cash pile
● Zeder, an investor in agribusiness and related industries, is keeping the bulk of the R1bn in cash from the sale of two companies in the kitty for now. Acting CEO Johann le Roux said the business is being conservative with its cash. “The board is being cautious,” he said, and only looking at new opportunities for its existing portfolio.
Le Roux, who was speaking after the release of the company’s interim results this week, said Zeder has R1bn in cash in the bank. This is the remaining proceeds from the sale of Pioneer Foods for R6.41bn and Quantum Foods for R308m. Zeder used some of the proceeds to settle debt and pay a special dividend of 230c a share (R3.9bn).
Le Roux said it was difficult to deploy capital in a new company around concerns about whether a due diligence exercise would be accurate given the effects of the
Covid-19 pandemic.
One investment being earmarked is R200m for a partnership between seed company Zaad and the East African Seed Company to expand Zaad’s footprint in East Africa.
Le Roux said the group was fortunate not to have been too adversely affected by the lockdown. “We were affected, but not as badly as others,” he said, in reference to the decrease in demand experienced by Kaap Agri, which supplies fuel, and the impact on The Logistics Group as fewer products required transport.
He said despite the company’s strong balance sheet and cash reserves, in agriculture nothing is certain. He warned that the industry faces other threats that could affect Zeder, such as dramatic changes inweather patterns or unanticipated pests and diseases.
Zeder’s portfolio includes Zaad; Agrivision Africa, a large-scale commercial grain operation in Zambia; Kaap Agri, which trades in agricultural, fuel and related retail markets in Southern Africa; The Logistics Group, a logistics provider; and the Capespan Group, which produces and distributes fruit worldwide. The group also owns logistics and terminal assets.