South Africa's Zeder seeking agribusiness investments

South Africa's Zeder Investments, an associate of investment holding company PSG Group, was interested in buying into timber and sugar cane companies to add to its portfolio of unlisted agricultural investments, it has said.

Chief executive Antonie Jacobs said at the company's annual general meeting on June 22 that it was attracted to timber interests that would benefit from strong demand for building timber as the construction boom continued.

It was also interested in sugar as demand had been fuelled by the growing ethanol market and the fact that least developed countries such as neighbour Mozambique stand to benefit from an EU-guaranteed price for the commodity from 2009 to 2015.

Jacobs said Zeder was looking beyond South Africa for possible future investment destinations. The company had R537 million ($75 million) of cash in hand at the end of February. But he said that to date, no timber and sugar cane investments had been found as the prices were too high.

Zeder, which listed last year, has a strategy of buying "substantial" stakes in unlisted agribusinesses such as Pioneer, KWV and Senwes. All were previously farmer-owned co-operatives. Zeder believes that as they commercialise, their shares will become more tradeable, unlocking value. But Zeder still faces the challenge of persuading some former co-operatives to change rules that limit shareholders from holding large stakes.

Business Report