SOUTH AFRICA – RCL Foods, South African consumer goods and milling company has inked a deal with Imperial Logistics to consolidate its logistics division, Vector with Imperial’s cold chain business.

Imperial Logistics Limited is an African and Eurozone logistics provider of outsourced, integrated freight management, contract logistics and distributorships in South Africa and internationally, with networks in 32 countries.

RCL not indicating the value of the deal will acquire certain assets and staff related to the cold chain business resident within the Seller’s Consumer Packaged Goods business in South Africa.

All relevant internal and regulatory approvals have been obtained and the transaction is effective from December 1.

Vector has entered into agreements with key customers to provide logistics services from the effective date of the Transaction.

RCL Foods owns well-known brands such as Ouma Rusks, Yum Yum Peanut Butter, Rainbow Chicken, Pieman’s pies, Nola mayonnaise, Selati sugar, Rainbow Chicken, and various pet foods. The acquisition will enable the company run an efficient cold chain.

For the year ended June 2019, the Rainbow Chicken owner reported an after-tax loss of R184m (US$12.08m) as increased pressure on its sugar and chicken business continued to hurt its operations.

RCL Foods, which reported an after-tax profit of almost R878m (US$57.63m) in 2018, also saw its headline earnings per share (heps) fall by 60.8% to 37.9c in the 12 months to end June 2019.

The company blamed high levels of chicken dumping and an adverse sales mix due to the imposition of a sugar tax, which triggered a 55% decline in cash generated by operations during the period.

The group’s earnings before interest, taxation, depreciation and amortisation (ebitda) declined 54.1% to R214.3m (US$14.07m), while ebitda for its sugar business plummeted 129.7% to a loss of R84.5m (US$5.55m).

Despite declining performance in the sugar and chicken business, RCL’s groceries portfolio recorded a 23.4% growth in ebitda to R639m (US$41.94m) during the period.