Karan gets approval to beef up its operation
Competition Tribunal gives nod to SK deal
Karan Beef, one of the largest beef producers in Africa, is about to get bigger after the Competition Tribunal approved its acquisition of SK Caine Farming, albeit with conditions attached.
Both companies are active in crop farming to produce feed for their cattle. They produce cattle for slaughter, slaughter all cattle produced in their feedlot at their abattoir, and supply beef carcasses and deboned beef cuts to wholesalers and retailers.
The competition watchdog said the deal can go ahead if the parties adhere to its terms and conditions.
“The conditions imposed on the transaction seek to support cattle farmers classified as historically disadvantaged persons. The conditions also include supplier, enterprise and socio-economic development commitments,” Gillian de Gouveia, spokesperson of the tribunal said, adding the tribunal will release more details on the conditions at a later stage.
Karan Beef is said to operate the largest cattle feedlot and abattoir on the continent.
The company was founded in 1974 by the Karan family and is based in Heidelberg, Balfour and City Deep.
The feedlot accommodates 210000 head of cattle at any given time. The Balfour-based abattoir has the capacity to process 2000 head of cattle every day.
South Africa is Karan Beef’s biggest market, but it also has a substantial export market. The company is currently approved to export to China, Hong Kong, Malaysia, The United Arab Emirates, Kuwait, Qatar, Bahrain, Oman, Jordan, Egypt, Mauritius, Seychelles, Maldives and all of Africa.
The multibillion-rand business has remained a family-owned business that is managed by its founder, Ivor Karan.
The Public Investment Corporation in 2018 valued Karan Beef at about R5.2-billion when it wanted to buy a 90% stake in the company. However, that deal stalled.
SK Caine Farming has been participating in the livestock and meat trade since 1974. The Kzn-based company’s feedlot was developed on a small scale in 1980, feeding 1000 cattle. The infrastructure and number of cattle grew as the business developed into the current establishment which accommodates and feeds up to 35000 cattle.
The tie-up, according to Karan Beef, makes sense due to a surge in fuel costs as it will allow it to buy and keep cattle in one area instead of going back and forth between Gauteng and KZN.
Conditions imposed seek to support cattle farmers