LAND O’Lakes Inc., a U.S. farming co-operative, said it’s close to making its first investment in Africa and plans further deals to capitalise on the continent’s agricultural potential.
The Arden Hills, Minnesota-based company plans to acquire a 50% stake in a South African distributor of crop inputs, Land O’Lakes Chief Executive Officer Chris Policinski said Thursday. He didn’t disclose the name of the company or the size of the deal.
The South African investment “is a platform to drive northward into more markets, and we’ll use our general knowledge of what countries are ready and what farmers ready for what services,” he said in an interview in Des Moines, Iowa. “It’s the next step of development.”
Land O’Lakes already has some experience in Africa via its involvement in various philanthropic projects via its not-for- profit arm. Advising farmers and connecting them to markets in sub-Saharan Africa with its rapidly emerging middle class may lead the company to make investments in the dairy industry, Policinski said.
In the U.S., Land O’Lakes is actively looking to acquire food companies that are “quickly accretive” to earnings, he said, citing as an example its 2012 purchase of Kozy Shack Enterprises Inc., which makes refrigerated desserts. “We’d like to do that again,” the CEO said.
In August, U.S. farm-product co-operative United Suppliers Inc. agreed to merge with Land O’Lakes Inc.’s crop-inputs business to create a chain of independent retailers.