Innscor has created a monopoly in the stock feeds sector after acquiring a controlling stake in PROfeeds
Happiness Zengeni and Tinashe Makichi
Innscor Africa has effectively created a monopoly in the stock feeds sector after acquiring a 59 percent stake in the second largest feeds manufacturer Profeeds. Innscor also holds a controlling stake in National Foods.
The stake in ProFeeds is being held by Innscor’s subsidiary Irvines Zimbabwe.
Sources say the acquisition of both Profeeds and Produtrade was made through Ashram Investments an investment vehicle jointly owned by Irvines with 66 percent and Annunaki Investments Private limited owning 34 percent.
Irvines is Zimbabwe’s biggest day old chick breeders who are also into large scale production of table eggs and broiler chicken meat.
The transaction was taken to the Competitions and Tariffs Commission for approval. However, sources say the fact that Innscor has a stake in Natfoods and indirectly in Profeeds will expose the stock feeds industry to a monopoly.
It is believed that NatFoods and Profeeds have already started synchronising their operations. “National Foods merged with ProFeeds because our marketing and sales are currently depressed while ProFeeds is doing well on the market but they don’t have adequate capital to match operating costs,” said an internal source.
CTC confirmed having received the notification for acquisition from Irvines to The Herald Business.
However, well placed sources said that according to the analysis made by the authorities it has been reviewed that the acquisition is set to create some market imbalances and approval of the acquisition has been hanging in the balance for some time.
Under the transaction Annunaki Investments a venture capital company will bring in capital into Profeeds while Irvines will oversee the management of their investment. Profeeds is a company incorporated under the laws of Zimbabwe, whose main business is the manufacturing of chicken, horse, pig, and dog feed and is a 100 percent subsidiary of ProGroup Private limited.
Profeeds is the second largest stocks feeds producers and operates from a property owned by its sister company Produtrade.
Produtrade ceased active operations after a restructuring exercise by the parent company, ProGroup Holdings limited around 2007 at the inception of Profeeds.
“Irvines and Profeeds have a vertical relationship so it’s quite possible that there are complexities that tend to arise from such transactions and there are possibilities that Innscor who now jointly own shareholding in Irvines and Natfoods will dictate things like prices and determine the companies they should trade with.
“Look at Lunar chickens they have a strong chicken industry but they depend on National foods and Irvines for stock feeds so as a result of that they may have no choice but to play to the tune to whichever prices set,” said the source.