31 August 2016

Remgro buys stake in frozen dessert maker

DIVERSIFIED investment counter Remgro seems to be building an appetite for specialised food businesses outside its staple holding in JSE-listed RCL Foods.

On Tuesday, Remgro — via its growth capital subsidiary Invenfin — said it had snapped up a 30% stake in Dynamic Commodities, a Coega-based producer and exporter of frozen fruit-based delicacies. The deal comes hard on the heels of Invenfin securing a strategic stake in artisanal chocolatier, DV Chocolate, about three months ago.

Invenfin houses Remgro’s venture capital style interests, but has a distinct food flavour, with influential stakes in rooibos-based iced tea brand developer BOS and Le Bonbon, a confectioner.

Invenfin executive director Stuart Gast said the company’s decision to invest in Dynamic was driven by the growth potential of the global frozen desserts market. He said that 95% of Dynamic’s revenue was generated in export markets.

Gast estimated the global market for ice cream at $50bn, with the frozen fruit market also showing strong growth.

Market watchers said developments in Invenfin were unlikely to meaningfully affect Remgro’s value or profitability in the short to medium term. Remgro’s main food investments are in RCL Foods and consumer brands giant Unilever SA. Whether Invenfin’s food interests are being assembled with a view to being incorporated into RCL Foods at a later stage is unclear.

At this point Invenfin’s strategy is to invest with a significant minority stake “so that the owners remain in control and retain their passion and leadership”.

Invenfin has identified technology and food and beverages as priority investment areas, especially businesses that have market traction and are trending globally. Source: BD Live