RCL Foods snaps up independent South African baking business Sunshine Bakery

SOUTH AFRICA – RCL Foods, a leading South African food manufacturer producing a wide range of branded and private label products, has expanded its baked goods portfolio with acquisition of Sunshine Bakery, one of the country’s largest independent baking businesses.

Indirectly majority-owned by AFGRI Group Holdings, the bakery serves a diversified customer base in the formal retail and general trade channels, through two regional bakeries in Durban and Pietermaritzburg, as well as various depots across the province.

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The maker of Rainbow Chicken and Nola mayonnaise brands already owns Sunbake bread, and the addition of Sunshine is expected to increase bread volumes in its baking network by 28%.

Sunshine Bakery was founded by Daniel Anastasis and his son Taki in 2005. Before that Anastasis ran Albany Bakeries’ Pietermaritzburg plant for 12 years.

Taki currently runs Sunshine Bakery, which according to its website has a staff complement of 300.

RCL did not provide details on the price of the acquisition, saying the deal with AFGRI Group Holdings fell below the threshold for categorisation in terms of JSE listings requirements.

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The transaction is subject to the fulfilment of both regulatory and commercial suspensive conditions by no later than 30 November 2022.

Expand value-added brands

The acquisition is in line with RCL Foods’ strategy to scale the value-added brands component of its portfolio and to expand the capability of its established baking business unit into new geographies.

In February the company delivered a 9.2 percent year-on-year increase in revenue to R17.1billion (US$1.11 billion) for the six months ended December 31, 2021.

The group’s baking segment however hit a bit of a slow bump as its revenue only increased by 2.2% to R2.98 billion (US$192.9m). The segment also saw an 8.7% decline in underlying Ebitda to R245.7 million (US$15.9m).

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The baking segment came under pressure due to high input costs in all operating units despite good volume growth in bread, buns and rolls, and pleasing operational improvements in milling.

At the time CEO Paul Cruickshank said RCL Foods was actively pursuing its strategic growth agenda with the aim of creating a focused and resilient value-added business that generates sustained shareholder value.

The group’s executive structure and operating model have been re-engineered in recent months to support this strategy.

The roles of CEO and COO have been consolidated under Paul Cruickshank; the RCL Foods group and Food Division executive teams have been merged to create a single executive structure; and a new value-added operating model with a clear growth mandate has been implemented.

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