Murray Bolton, joint chief executive of Cargo Carriers is excited at what the two companies will bring to each other. Cargo Carriers brings a high-level SHEQ (Safety, Health, Environment and Quality) capability and access to capital to enable BHL’s growth ambition, while BHL gives Cargo Carriers a significant footprint in sub-Saharan Africa and extends its recently won gains in the mining industry in South Africa.
BHL’s primary business is the transportation of copper concentrate, lime and sulphuric acid in Zambia and the DRC, although it also provides logistics solutions in the manufacturing and agricultural sectors. The fit with Cargo Carriers in this respect is a good one, with Cargo Carriers having substantial logistics operations in both Agriculture and Mining.
“There is no doubt,” says Garth, Murray’s brother and joint CEO. “The centre of gravity for mining has moved north. If we want to be players in this market we needed to be present in these countries.”
He has a point. Central Africa has also been described as the breadbasket of the world, something that will not have been lost on this strategically-managed supply chain business with major interests in agricultural and chemical logistics.
Zambia is in the middle of the East African sugar belt. Cargo Carriers’ long-stated intention to compete in this zone by extending their operations from Swaziland, Mpumalanga and Zimbabwe will be given strength by a presence on the ground in Zambia. The acquisition also provides risk reduction for Cargo Carriers as it spreads its business over more countries and more currencies.
The move to strengthen its Southern and Central African business capability will please global mining, agricultural and chemical businesses who are themselves looking to expand into the world’s fastest growing continent, but are faced with challenges to find logistics partners who deliver the required Safety and Environmental standards.
Although the acquisition price is dependent on profit guarantees over the next three years, both parties believe that there are substantial growth possibilities that will emerge as a result of the transaction. Bolton asserts that BHL management and shareholders’ real opportunity comes from growing the business beyond the three-year horizon. Indeed, for Cargo Carriers the acquisition of local experience and know-how is as important as the acquisition of the long-term contracts that BHL hold.