Zungu Investments Company (Zico), the black economic empowerment (BEE) styled player, established by prominent business activist Sandile Zungu, is going Pan African.
This may tally with the latest Zungu preachings. In his capacity as general secretary of the reincarnated Black Business Council (BBC), Zungu has been preaching a need to jump start BEE into an industrial affair. The BBC is running what looks to a renewed campaign to groom black industrialist which requires graduation of BEE from passive equity participation into becoming champions of South Africa’s mission to reindustrialise. The campaign launched by president Jacob Zuma was reiterated last week during the BBC’s annual convention.
Launched at the back of South Africa’s economic redistribution initiative, BEE, Zico has grown into one of most prominent players in this space and seems to have matured into a fully fletched investment house. It has participated in some of the biggest BEE equity transfer deals with an apparent objective of emulating the development path of South Africa’s investment conglomerates like Remgro.
Lately the group scooped an equity stake in KwaZulu-Natal based operation Spring Lights Gas (SGL). Together with Kwande Capital, Zico assumed 51% stake in SGL a major gas distribution player.
With that base Zico has set its eye on expanding across the broader African continent. Zico’s MD Tshego Sefolo said “At Zico, we believe that Africa offers huge potential growth. Looking for opportunities beyond South Africa’s borders, and developing relationships with like-minded partners forms a significant part of our strategy.”
Sefolo said the company has taken a measured approach, which balances exposure through partnerships with other players seeking African equity. The partnership approach is designed to mitigate the risk inherent in growing an African portfolio.
Sefolo referred to partners such RMB Corvest, which has enabled the acquisition of a share in Nigerian-based company Vital Products, a successful manufacturer and importer of a range of food products.
Another partner included in the growing arsenal of African investments, is out-of-home media company Outdoor Network, which is a powerhouse of Africa’s outdoor advertising community. The company, in which Zico holds equity, has major operations in SA and presence in DRC, Ghana, Botswana and Nigeria. Extending its reach within the media services, Zico has also acquired a shareholding in Provantage in early 2012, well-known locally for its innovative approach to outdoor media.
Additionally, Zico has acquired an interest in a local subsidiary of the UK-listed multinational The Innovation Group. The subsidiary, Johannesburg-based Innovation Group South Africa, provides outsourced solutions to an established customer base that spans diverse sectors including motor vehicle and electronics products and manufacturers, and finance and insurance companies.
The company said across South Africa, a number of powerful joint ventures have enabled Zico to realise their growth strategy, which is to participate in established companies that exhibit measurable strengths. This includes the acquisition of a shareholding SGL.
Zico’s mining and resources arm, African Vanguard Resources (AVR), enters into partnerships that support the company’s strategic objectives. In particular, the company recently entered into a restructure of Rockwell Diamonds Incorporated, a mid-tier diamond mining and development company which represents the focussed evolution of the company’s strategic goals. “Not only does this transaction represent a milestone in the development of Rockwell and the maturation of AVR’s goals, but it facilitates the entry of new participants into the diamond mining industry.”
Sefolo said “We are pleased with the performance of our portfolio of investments, which are performing in line with our expectations. This enables us to focus on identifying new investment opportunities, while working with our management teams to extract value in the businesses we have invested in.”
Zico focuses on the acquisition and active management of a number of investments within the automotive, services, mining and resources sector. Whilst committed to delivering a consistent performance for its shareholders, the company simultaneously strives to select investment partners that together can creatively respond to the needs of both local and African communities.