GRINDROD, the diversified shipping and logistics group, has expanded its fuel business, finalising the purchase of a 75,5% interest in Botswana-based bulk liquid fuel transporter Petrologistics, which will now trade as Grindrod Petrologistics.
Petrologistics operates in Botswana under long-term contracts with customers such as Puma, Engen and Shell, which supply much of Botswana.
JSE-listed Grindrod said the interest in Petrologistics held by South African logistics group Imperial Holdings, its Botswana subsidiary Transport Holdings, Botswana citizens, and the Citizen Empowerment Development Agency Venture Capital Fund, would be acquired for an undisclosed amount.
This will be effective from January 1 this year.
Grindrod's fully owned subsidiary, Fuelogic, owns 24,5% of the new acquisition, while Petrologistics MD Todd Mangadi will remain with the company and purchase a 5% stake in Petrologistics from Grindrod.
Hylton Gray, CEO of Grindrod's freight logistics division, said yesterday the deal was in line with the group's strategy of investing in assets that were part of the supply chain.
"Providing transportation and other integrated services for specific commodities along import and export corridors is key in Grindrod's service offering," he said.
Grindrod first entered the petrochemicals industry in 2008 with the acquisition of WM TransLogistics, and two years later concluded the buyout of Fuelogic, a bulk liquid transporter operating in southern Africa. It had a fleet of 114 specialised road tankers providing primary distribution of fuel from refineries and import terminals to inland terminals, depots and large customers, and secondary distribution from inland terminals and depots to retail and smaller wholesale customers.
Sasha Naryshkine, an asset manager at brokers Vestact, yesterday said Grindrod was looking to be the "go to" logistics company in Africa, although this would take time.
"Strategically, (it) is looking at neighbouring countries to get an edge, as they are competing with Transnet," he said.
Fuelogic and Petrologistics will operate as one business, with a fleet of 380 road tankers servicing sub-Saharan Africa.