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AGRICULTURE: BKB On The Charge. Is W Cape Next?

 



Recent Western Cape Business News

THE Western Cape agri-business sector has been a hot-bed of activity of late with the split up of Kaap Agri and the tilt (albeit unsuccessful) by Senwes at Grainfarmers (aka Moorreesburgse Koringboere or MKB).

CBN reckons, though, it is further afield in the Eastern Cape – Port Elizabeth, to be exact, where the next great thrust in the agri-sector may emanate. The company in question is the little known BKB, which despite its relative obscurity looks like it will be a prime mover in the inevitable consolidation of the agri-sector.

BKB was formed on mid-1975 with the amalgamation of three farmers’ organisations, namely Farmers’ Co-operative Wool and Produce Union, Boere-Saamwerk Beperk and Koöperatiewe Wolmaatskappy Beperk – all companies with long histories in the local agri-sector.

Boeremakelaars (Koöperatief) Beperk – as the company was known - was transformed into a full-fledged company with shareholders in the late nineties, taking the slicker guise of BKB Limited.

Since then PE-based BKB has rapidly stretched an impressive footprint across SA – offering a variety of services in grain, wool, mohair and livestock as well as in property, financing, auctioning and retail (via BKB Trading Stores).

In the year to end June 2011 BKB posted a rather chunky R70 million in after tax profits, a figure that might have been substantially higher were it not for a glitch in the grain trading division (which reported losses). What’s probably the most impressive aspect around BKB’s business is an open-minded attitude to new endeavours (which is not always readily apparent at former co-operatives). The diversity of operations at BKB no doubt stems from this more adventurous spirit, which otherwise might have left the company locked mainly into the traditional wool and mohair strengths in the Eastern Cape.

A good example of the company’s innovation is the recent endeavour by its financial services arm, BKB Agrifin, in linking up with Absa Business Bank for what appears to be a promising financing venture. BKB CEO Wolf Edmayr said the arrangement would allow the company to use the bank’s resources to finance its clients. “BKB’s knowledge of its client base enables it to rate the needs and creditworthiness of applicants while Absa will be able to substantially increase the loan book. We expect significant synergies to flow to our other divisions from this agreement.”

BKB’s sense of adventure does not end with product and service innovation. Last year the company successfully bedded down recently acquired East Cape Agricultural Co-Operative (ECAC), a deal that Edmayr reckoned made BKB a significant player in farming requisites.

The company then snapped up 20% of Northern Cape based agribusiness KLK. This deal proved to be a precursor to a recent full-scale advance on KLK – a deal that would have created an agri-giant with annual sales of more than R4 billion. Unfortunately BKB were officially re-buffed by KLK in March, presumably because KLK shareholders believed the offer (which included a cash and share offer) undervalued their company. Subsequently BKB sold their 20% stake in the company back to KLK.

This set back aside, the intentions to grow by merger and acquisition are clear, and CBN wonders if BKB’s fertile attentions may now turn to the Western Cape. Surely it’s a matter of time?


 
 
 
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