PET Food Processing - September 2018 - 50

them are members of PFI, are optimistic the market will
keep growing into the future.
Some of the companies have defied political and economic trends such as the sacking of South Africa's highly
regarded former Finance Minister Pravin Gordhan, the
recent removal of former President Jacob Zuma by the
ruling party Africa National Congress, volatility of the
local currency and flat growth projection, to announce
new investments that could trigger demand for grains
and an increase in the country's milling capacity to feed
the pet food processing space.
For example, leading South African consumer and
milling company RCL Foods Ltd., formerly Rainbow
Chicken Ltd., recently invested $18.7 million in beverages and pet food infrastructure.
The company's CEO, Miles Dally, said earlier the investment will "enhance our manufacturing capabilities
in higher-margin added-value products."
RCL, which has one mega grocery plant for the manufacture of culinary and pet food products, said recently
said it had successfully merged two separate feed businesses of Epol & Molatek, formerly Rainbow and TSB,
"to create South Africa's largest animal feeds business."
Growth of South Africa's pet food industry has seen
some mergers and acquisitions, an indication of the
market's resilience against a sluggish economy that grew
by a mere 1% in 2016 and is projected to grow by 1.1%
in 2017 on the back of expected good performance of
the agriculture and mining sectors.
Nestle South Africa successfully disposed of its Pet
Food/Purina business in May of 2016 to Martin &
Martin "as part of on-going strategic reviews of our regional portfolio."
Martin & Martin acquired the local Pet Food/Purina
brands and Nestle's Pet Food/Purina manufacturing facility in N'dabeni with 96 employees, said Ravi Pillay,
who issued the acquisition statement on behalf of Nestle
South Africa.
"Nestle South Africa is confident that this decision is

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PET FOOD PROCESSING | September 2018 | www.petfoodprocessing.net

in the best interests of the business and employees and
other key stakeholders including its customers, distributors and consumers," Pillay said.
Analysts said South Africa's pet care has continued to
post strong growth driven mainly through an increase
in unit prices.
According to market researcher and analyst
Euromonitor International, the market has registered a
new trend where "volume growth lagged significantly
behind value growth."
"The South African economy remained constrained
by slow growth in 2018," Euromonitor said in its June
2018 report, "Pet Care in South Africa." "This combined
with the volatile rand, resulted in massive cost pressures
with strong rising prices leading consumers to seek
more affordable brands and pack sizes."
But for the pet food manufacturers and suppliers in
South Africa, the survey by Euromonitor showed a trend
is emerging where consumers are now demanding "a
wide range of products across a variety of price points,
which allows room for both international and local players in pet food in South Africa."
Some of the pet food products that utilize wheat or cereal ingredients include Pedigree, Sheba, Perfect Fit and
Whiskas by Mars Africa Pty Ltd, Bobtail, Ultra Dog and
Dogmor & Catmor by Foodcorp Pty Ltd., and Beeno, Bob
Martin, Epol & Lopis by Martin & Martin Pty Ltd.
With political stability in South Africa still a matter
to watch, especially with the recent pronouncement of
land expropriation without compensation and an economy whose performance is still sluggish, many of the
pet food manufacturers and suppliers are likely to focus
on consolidation of their existing market share or go for
joint ventures as a part of their low-risk strategy in the
short and medium term.
PFP
Shem Oirere is a Nairobi, Kenya-based freelance journalist who specializes in covering the African grain markets.
He may be reached at soirere@gmail.com.

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