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POST-MERGER

Making a smooth transition

Initially, Pioneer Foods focussed on the integration and efficiency of the newly-merged businesses of Sasko and Bokomo, by aligning operations and streamlining management structures where possible, mainly in the milling and baking divisions.

The company also adopted a decentralised management philosophy model, in order to maintain the right operational focus and ownership at divisional levels.

The merger provided a joint revenue of R3,5 billion per annum, earnings of R130 million, total assets of R1,54 billion, and total fixed assets of R576 million.

Pioneer Foods enters a growth phase

The post-merger era was a period of high growth and diversification for Pioneer Foods. The company embarked on a series of acquisitions and joint-ventures, as well as in-house product innovation.

Pioneer Foods launched into expansion mode:

  • The core business of wheat milling and baking was expanded into maize milling and rice, with a renewed focus on pasta. New brands such as White Star and Puccini were launched.
  • Household names such as Marmite, Bovril, Ceres, Liqui-Fruit, ProNutro, Maizena, Redro, Peck’s, Safari dried fruits and Moir’s were acquired.
  • A joint venture was established with US-based food global HJ Heinz Company, with brands such as Heinz tomato ketchup, Wellington’s chutney and John West canned fish products introduced into South Africa. And in the frozen food product business, brands such as Mama’s pies and a range of Today food products was also part of this venture.
  • A deal was signed with the American PepsiCo Company to manufacture and distribute Pepsi-Cola, Diet Pepsi, Mirinda and 7-Up in South Africa;  and
  • A footprint was established in certain African countries, and in the UK.

Preparing to list on the JSE

In the 10 years after the successful merging of Sasko and Bokomo, the Group practically trebled in size.

By 2007, Pioneer Foods was ready for the next step to potentially unlock more value to its shareholders. At the time shares in the company were traded to the market informally - “over-the-counter”. The next logical step was to enhance tradability and investor interest by listing the group on the Johannesburg Stock Exchange.

 

ROAD TO LISTING