CENTURION, SOUTH AFRICA — AFGRI Group Holdings announced on April 8 plans to form a grain storage platform to grow capacity in South Africa and improve food security.
AFGRI Grain Silo Company Proprietary Ltd. (AFGRI Grain Silo Company) plans to expand its current storage from 4.7 million tonnes to 6 million tonnes in the near future. The current storage footprint consists of grain silos and bunker complexes throughout six provinces in South Africa.
“This will allow us to not only cater for grain storage, but to expand into the storage of other types of commodities,” said Chris Venter, chief executive officer of AGH.
AGH is an investment holding company with interests in food, agriculture and financial services related companies providing products and services to ensure sustainable agriculture and food security.
Three new institutional investors have committed to invest alongside the group: STANLIB Infrastructure Investments, Wiphold, and the Land Bank. This investment consortium initially will own storage facilities with a total value of R3.6 billion ($255.8 million) at inception.
“AFGRI Operations Proprietary Limited will manage the storage facilities on behalf of AFGRI Grain Silo Company in terms of an evergreen management agreement,” Venter said. “This arrangement provides the strategic benefit of AFGRI’s excellent track record in managing storage operations, and deep experience of the sector.”
AFGRI Operations will continue to be a JSE Approved Storage Operator for all the grain silos, while the grain silos will continue to be JSE Approved Silos and JSE registered delivery points.
“High-quality commodity storage and related services is in demand by our customers, and through the consortium, we aim to ensure that we enter new areas across South Africa and simultaneously grow capacity,” said Jacob de Villiers, MD of AFGRI Grain Management. “For clients making use of our silo and bunker facilities, it is business as usual. Farmers and grain silo users will continue to experience AFGRI Grain Management’s proven expertise and track record on an ongoing and uninterrupted basis.”