South African investors announced last week that a fertilizer factory in east Africa is poised to win state approval that will enable the J. & J. Covid brand to move forward into the second phase of expansion into Africa.
Farmstate Corp. posted on Twitter Thursday that J. & J. Covid Super Serps, which began producing fertilizer in Kenya in late 2017, is expected to be licensed by the Kenyan government in mid-2019. That would allow it to increase the capacity of its factory in Lamu.
It is the second day of reporting on Naspers Ltd.’s purchase of a majority stake in Farmstate, a privately held company best known for its food business in South Africa. The deal, valued at as much as $1.3 billion, closed Friday.
The Covid brand, which includes fertilizer and an insecticide that kill caterpillars and aphids, is being licensed to Farmstate by J. & J. Covid, the mining company that had been in partnership with the company.
Farmstate said last week that the licensing would result in the formation of a joint venture with J. & J. Covid to run the factories. But that plan ended with the announcement of the deal to sell a 75 percent stake in Farmstate to Naspers for about $1.3 billion.
Sophie Twala, CEO of Farmstate, said Monday that J. & J. Covid’s purchase by Naspers on Friday “will provide Farmstate with the financial strength to accelerate its growth plans on both the top and bottom lines.”
Farmstate said it was working with J. & J. Covid on the details of the planned joint venture and that it would be announced in early 2019.
The J. & J. Covid company’s global influence was briefly thrust into the spotlight earlier this year after a chemical fired in a factory near Johannesburg burned an Ethiopian construction worker to death. A local journalist investigating the factory’s closing used photos of Covid to illustrate a report on the incident. Covid told a South African court in July that the photos were inaccurate.
Naspers, through the J. & J. Covid business, has been expanding in Africa, where it has grown largely through acquisitions of technology companies or stakes in companies listed on South Africa’s stock exchange. For example, Farmstate operates television channels and print publications, mostly in South Africa.
Two previous media companies, Ascential Group and MTN Group, would have been Naspers’ first venture into the food business in Africa.
Ascential, which runs a publishing and media group, was the first acquisition by Naspers’ food business, which also owns the sushi chain Eddie’s Sushi, and several restaurant chains, including Polo Roll. With its buyout of Ascential in 2014, Naspers added to its existing footprint in Africa.