Distell aiming to double sales by 2020 through M&A
According to Richard Rushton (pictured), Distell CEO, to offset slow growth in its home market South Africa, the company intends to double sales and profit over the next four years by way of cross-border acquisitions. The South African liquor producer, which makes various ciders and brandies, as well as the popular Amarula Cream, earns 75% of its annual R12 billion revenue and R1.2 billion headline earnings in South Africa; a country whose economy is forecast to grow by just 1% this year. Rushton, speaking to Reuters, said:
"We've got the ambition to double the size of our business by 2020 and we are not going to create that without some sort of inorganic activity We are exploring opportunities in Africa, but we are also doing so further afield."
While Distell generally prefers partnerships in developed markets such as the US, it has set up a manufacturing facility in Ghana and bought land in Angola to do the same. According to Rushton, the company is also looking for other opportunities in Africa, and said he was most interested in middle-income emerging markets. He added that Distell would also consider acquisitions of established consumer goods companies, and not only distillers and brewers.