Ostrich meat and leather producers announce merger
23/07/2018
Managing director of Mosstrich, Francois de Wet, said on making the announcement that the two companies have discussed the possibility of a merger several times in the last 15 years, but that discussions about the proposed deal began in earnest in November 2017.
He said it was premature to speculate about exactly what the new, merged company would look like, but he confirmed that if the authorities give the proposal the green light, the combined business will have a new name. The new business will have the option of continuing to use the existing brands that the two groups own.
Mr de Wet explained: “The main driver behind the intended merger is the decline in size of the South African ostrich industry. From 2000 to 2010 we slaughtered and processed on average 240,000 ostriches per annum. From 2011 to date, the average has dropped to around 160,000, with an expected slaughter number of 130,000 for 2018-2019.”
A ban on ostrich meat exports from South Africa owing to outbreaks of avian influenza and what he called “subdued demand” for exotic leather at the moment pose big challenges, Francois de Wet added. But he said that combining the forces of Klein Karoo International and Mosstrich (including the SCOT tannery), would ensure sustainability for ostrich farmers and existing processing units, maximise revenue on the international market, make new market development more effective, and help stabilise the entire industry.
Subject to approval, the merger could be confirmed by the end of September.
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