Clover CEO reveals big plans to create jobs around Africa – despite protest action

EDINBURGH — Anti-Israel factions in South Africa have been trying to put the kibosh on a deal by Clover Industries that could lead to thousands of new jobs across the continent. Among those who have indicated that they do not approve of a Tel Aviv-based consortium getting involved in the South Africa based company is shareholder Brimstone, which prides itself in being black controlled and managed. Brimstone says it has a “value driven corporate identity”, but it doesn’t clearly stipulate what these values are. It says it has taken note of widespread outrage about the deal and is rethinking its position. Clover CEO Johann Vorster, meanwhile, is confident the investment will enable Clover to make a positive impact on the SA economy and says management will also buy in alongside the new investors. He’s not backing down – and that’s good news when you consider that South Africa’s unemployment rate is one of the highest in the world and that poverty is a challenge across the African continent. – Jackie Cameron

By Loni Prinsloo

(Bloomberg) – Clover Industries Ltd. management plans to buy into the business alongside a group of investors that offered R4.8bn ($338m) to acquire South Africa’s largest publicly traded dairy-products manufacturer.

If the transaction goes ahead, the Johannesburg-based company will expand into other African markets, Chief Executive Officer Johann Vorster said in a phone interview on Tuesday. A consortium led by Tel Aviv-based Central Bottling Co. offered R25 a share for Johannesburg-based Clover in February, and shareholders will vote on the transaction on March 29.

“The buyers are mainly family-owned businesses that have a longer-term view than some of our current investors,” Vorster said. “Management has a long-term view and is committing to another 5 years with Clover.”

With consumer spending declining in its main market of South Africa, Clover plans to invest in technology, develop new products and increase its market share. The company continues to invest in expanding capacity and recently added a new yogurt line, with plans to introduce products including flavored margarines, said Vorster.

Outside its home market, the company plans initially to build a more substantial presence in eastern African countries including Kenya, Tanzania and Malawi, he said.

Activist objections

The offer for Clover sparked controversy last month when a pro-Palestinian activist group objected to the deal. South Africa’s ruling African National Congress had close ties to the Palestine Liberation Organisation during the apartheid era and Israeli interests are frequently the target of protests.

Brimstone Investment Corp., which is part of the bidding group, said Feb. 7 it’s reviewing its role in the transaction.

“As far as we are aware Brimstone is still part of the deal at this point,” Vorster said.

Clover said first-half earnings, excluding some items, rose 5.1% to R235.9m ($16m), while the interim dividend was increased by 5%. The shares were little changed at R22.64 as of 9:50am in Johannesburg, valuing the company at R4.3bn.

Statement of intent: Brimstone

(Registration number 1995/010442/06 Share Code: BRT ISIN: ZAE000015277 Share Code: BRN ISIN: ZAE000015285 (“Brimstone” or “the Company” or “the Group”)

Having regard to our Company’s values driven identity, we have taken note of the widespread outrage in respect of Brimstone’s participation in the proposed purchase of South African company Clover Industries Limited.
Brimstone has decided to review its role in the proposed transaction.