Sure Kamhunga
25 March 2009
Johannesburg — DIVERSIFIED investment group Lonrho said yesterday that its investments in Africa including SA were delivering strong growth, and the continent remained ripe for investment despite the global meltdown.
Executive chairman David Lenigas said in the first of the group's quarterly updates to be issued to shareholders that in the three months to last December turnover rose 132% to £21,9m, while earnings before interest, tax, depreciation and amortisation showed a loss of £1,9m, compared with a loss of £3,6m in the year-earlier quarter.
"The announcement of the first-quarter results marks a tangible coming of age for Lonrho. We now have businesses operating across five strategic sectors in 17 countries in Africa with reported revenues increasing 53% on a like-for-like basis against the same period last year," he said.
"We expect Lonrho's operations to continue to deliver strong quarterly trading performances in 2009, and we are focusing on strengthening our core businesses. We remain extremely positive about Lonrho's prospects in our chosen countries of operation and specific market sectors across Africa."
Lenigas said that in the past two years the group had created more than 1000 direct and indirect new jobs from its African operations, which centred on five sectors: transport, infrastructure, agriculture, support services and hotels.
These businesses -- which included prefabricated building manufacturer Kwikbuild, which last year opened a new plant in Port Elizabeth, and a fruit salad processing line at the OR Tambo International Airport -- were well positioned to capitalise on further growth opportunities.
Kwikbuild prefabricated structures can easily be erected as classrooms, clinics and hostels. The new production facility opened in Port Elizabeth in November last year almost trebled Kwikbuild's capacity.
"This has enabled it to win its first export orders to Angola. Significant pan-African export opportunities are developing for the company through Lonrho's extensive African network," Lenigas said.
Lonrho had established a logistics firm, Rollex SA, which had expanded its cold store and export facility at OR Tambo. Rollex's fruit salad processing line was now supplying processed fruit salad to local retailers and it had opened new markets in Europe, in particular the UK where it was supplying to major supermarket chains such as Tesco and Sainsbury. The fruit salad facility was expected to add turnover of $20m to the Rollex operations this year. Lenigas said Lonrho, which at its peak in 1995 was a sprawling conglomerate with operations in 15 sub-Saharan Africa countries, believes Africa is the place to be.
CEO Geoffrey White recently told Business Day that Lonrho had raised more than R250m at the end of last year to invest in Africa, including SA where it saw growth opportunities in the agricultural and information technology sectors.
Lenigas said the global meltdown was not as severe for African economies as originally feared. "Although the impact of the global recession is being felt across Africa, the impact on the African continent is less severe and forecasts expect sub-Saharan growth in gross domestic product to continue in 2009 albeit at a slower rate. The board remains confident the company is focused on market sectors and specific countries that will continue to see growth."
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