4PL.COM acquires AFGRI Logistics

4PL.COM acquires AFGRI logistics a division of AFGRI Operation Limited

4PL GROUP, a market leader in supply chain solutions to the bulk industry in Sub-Saharan Africa, has acquired AFGRI Logistics a division of AFGRI Operations Limited. The division was sold to 4PL. GROUP as a going concern, effective 01 November 2010, and included all current employees, assets and contracts.

4PL.COM, a wholly owned supply chain company of the 4PL GROUP, will be responsible for the exclusive supply and execution of AFGRI Operations Limited’s bulk grain commodity within Southern Africa under a long term agreement.

The deal is a win/win for both companies as AFGRI Limited will gain access to the full bouquet of supply chain products and services under the 4PL GROUP umbrella. 4PL GROUP placed the assets under a specialised asset business, 4PL Fleet, and the long term contract has been housed in a business that had additional capacity and a requirement for greater agricultural volume to fill empty transport legs especially under its mineral contracts.

Brendan Pearson, group managing director of the 4PL. GROUP, says the acquisition effectively brings to market a new big player in the bulk supply chain industry. “4PL.COM has built a stable platform over the years and is now ready to add this agricultural volume to its base volumes and leverage further growth from it. This deal allows us to offer further value to both our local and international customers and prospective customers due to the higher base volumes on our product platform, which essentially optimise assets and increase economies of scale. It also delivers guaranteed monthly tonnages,” explains Pearson.

The agreement makes 4PL.COM one of the largest agricultural transporters in the country, with a natural increase in mineral commodity. To accommodate these increased volumes, the company has significantly expanded its contractor base. But Pearson says apart from this, it’s business as usual for the two companies, with substantial benefits to be realised on both sides.

“We have the necessary capacity to add the AFGRI volume to our existing structures, largely due to our IT systems. Our technology offers real-time access to customers and our internal operators. This provides transparency and allows all parties to proactively manage the contracts and optimise the loads with independent loads in the market, therefore reducing costs. Our infrastructure and central finance and admin functions also allow us to increase economies of scale.

“This means that neither our, nor AFGRI’s existing customers, will be impacted negatively by the acquisition. Direct advantages to existing 4PL.COM customers include improved opportunities to benefit from return load cargo principles, due to the greater tonnages on our books. Mineral customers would also benefit as the agricultural volume we have is the type of cargo highly sought after to fill empty legs, a large cost saving.

“AFGRI will enjoy greater service levels due to a dedicated team now operating the logistics leg of their transactions. This should make AFGRI more competitive in the market,” Pearson explains.

The acquisition is directly in line with 4PL.COM’s growth plans, which also include further expansion into Africa where many countries have high levels of economic growth off low bases, coupled with rich mineral reserves. This suits 4PL.COM’s business model which has excellent cross-border functionality, and as such represents good future growth opportunities for the company.

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