To bolster expansion in its product portfolio, South African food ingredient manufacturer, Synercore, has curried Norfund’s direct investment worth its weight in gold – ZAR 80M (US$4.7M).
Established in 2016, Synercore has a specialty in the formulation and manufacture of food ingredients and distributing them to fast-moving consumer goods companies, precisely in the dairy and cereal industries.
The company trusts that this expansion will expand its ingredient portfolio as well as provide affordable products to the dairy and cereal industry within and outside South Africa.
Similarly, Norfund, the Norwegian Investment Fund for developing countries, expressed optimistism that the investment is crucial in attracting major food companies who prefer to import food ingredients despite the country having a well-developed food sector. According to the country statistics, in 2019 the country imported more than US$1bn in food ingredients.
“By owning core ingredients in the baking and cereal industry, we believe Synercore will be able to formulate more tailored solutions to clients at the best price in the market, leading to further business development and reducing imports”, said Kemp, Investment Manager at Norfund.
Norfund also conveyed content in developing Synercore as a core local producer of food ingredients, thereby creating more highly skilled jobs, while strengthening food security, increasing product shelf life, thereby reducing food waste, and promoting import substitution.
As part of the transaction, Synercore will acquire two other companies, Impilo and Sizwe. Impilo supplies soy flour to predominantly the baking, confectionary, and culinary industries.
Sizwe was established to extrude, roast, steam cook, pack and blend any type of grains in the baking, cereal, dairy, and meat industries, both from GM and non-GM sources.
Dr. Tertius Cilliers, CEO of Synercore revealed that these acquisitions will expand capacity and improve efficiencies as far as blending and manufacturing is concerned.
He also added that it will allow Synercore to backwardly integrate into improving supply chain sustainability, and further diversify and expand the service offering.
Synercore has a strategy of investing in the future of the agricultural and food industries, attracting the best food formulators, product developers research and development, and application specialists to also promote food safety and security on the African continent.
“Through the involvement of Norfund, as a key stakeholder, we will be able to extend our reach even further, and we believe that we can inspire the next generation of farmers and scientists within the agriculture and food industry”, says Dr. Cilliers.
