Cargill Acquires Afgri’s Clark Cotton Business

In a deal which will double its cotton volume in Africa, Cargill takes full ownership of three gins in Zambia, three in South Africa and a majority shareholding in a company owning two gins in Malawi. The acquisition is subject to regulatory approvals which Cargill is hopeful will be received within the next few weeks.

Comments Paul Kinney, president of Cargill’s cotton business: “There are valuable synergies between our respective operations that will provide genuine benefits both to our customers and also to local farmers. Clark has very strong links with farmers and good engineering skills, while we have significant risk management and international marketing experience. The combination will maintain an outlet for locally-produced cotton and, by selling crops abroad, bring in revenues for national governments.”

The eight gins currently produce around 150,000 bales of cotton a year and supply the international spinning industry and regional oilseed market. In the Malawi joint venture, Cargill will partner with Admarc, the Malawi government’s agricultural and marketing corporation, which is the existing minority shareholder.

The deal involves approximately 500 permanent employees in the three countries. During the high season – between July and October – an additional 3,000 to 4,000 seasonal workers are employed at the gins.

“Cargill’s international expertise in the cotton industry and reputation for business excellence, combined with Clark’s good relationship with the growers, will help to enhance and develop the full potential of the gins,” concludes Kinney.