Grindrod buys railway company
May 16, 2005
In an unexpected announcement today (Monday, 16 May 2005), Durban-based Grindrod Limited continued on its acquisition safari by acquiring a 50% share of Port Elizabeth-based Sheltham Locomotive & Rail Services.
Sheltham has made a name for itself in recent years as the owner and operator of a substantial fleet of locomotives both in South Africa and regionally. The company also has a marine division servicing offshore marine power plants and an air charter business division servicing South Africa and adjacent countries.
Grindrod was extremely pleased about the acquisition, which follows its stated strategy of investing in the South African logistics industry, said group managing director Ivan Clark.
“The strong shipping markets continue to generate good cash flows which we need to invest carefully in core businesses.”
Roy Puffet, the current owner and managing director of Sheltam, said the acquisition was exciting for Sheltam and will take the company to the next level of growth.
“There are substantial synergies in cross marketing opportunities between Grindrod and Sheltam which can be capitalized upon. In addition a strong partner like Grindrod would assist Sheltam in maintaining its position of being the number one private rail operator in Southern Africa.”
Grindrod’s Landfreight Director, Laurence Stuart-Hill added that the 50% stake in Sheltam not only provided Grindrod with a good investment opportunity but also a sound platform to progress any rail privatization and concessioning opportunities in Southern Africa. The business of rail went hand-in-hand with Grindrod’s strategy of owning the complete supply chain.
“It is our vision is to offer to customers an integrated chain utilizing owned service companies,” he said.
Grindrod’s acquisition of 50% of Sheltam also follows Spoornet’s recent announcements that they will be creating a framework to allow private operators to participate in South African rail services.
The purchase price was undisclosed but indications by Grindrod management are that this is the largest acquisition in Grindrod’s landfreight expansion programme to date.
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