Life cycle: Johann Vorster, CEO of Clover, on a walk around at the Clover plant in Olifantsfontein, Gauteng. Picture: SUNDAY TIMES
Life cycle: Johann Vorster, CEO of Clover, on a walk around at the Clover plant in Olifantsfontein, Gauteng. Picture: SUNDAY TIMES

Clover has  brushed aside threats to boycott  its products by opponents of the R4.8bn proposed buyout of the group.

A consortium of companies, led by Israel-based Central Bottling Company (CBC), has offered Clover shareholders R25 per share in a deal seen as supportive of government’s foreign direct investment drive.

“We cannot select our shareholders,” Clover CEO Johann Vorster said on Tuesday in response to the criticism about the composition of the consortium.

Clover management’s focus was building the company’s brands and increasing market share, he said.

“The mother (Clover) brand is well-known and consumers are loyal to our various brands,” he said.

Clover CEO Johann Vorster joins Business Day TV to share some perspective on the numbers and an update on the offer made by a consortium of businesses that offered to buy the company for R4.8bn.

Clover’s brands include Tropika, Krush and Super M.

The transaction has attracted criticism from pro-Palestinian quarters due to its Israeli connection. Trade union Food and Allied Workers Union (Fawu) and Palestinian solidarity organisation BDS SA have come out strongly against the deal.

BDS SA threatened to boycott Clover products. It said its actions could also include disruptions at Clover’s operations.

Vorster said the proposed transaction was in line with President Cyril Ramaphosa’s push for foreign direct investment. The consortium would use the acquisition of Clover as a platform for further growth into the rest of Africa, he said.

“It is good for SA that an international company wants to grow South African products. And this is not a merger, so there will be no job losses.”

The consortium, known as Milco, plans to delist Clover from the JSE. If the transaction proceeds as planned,  it will delist in mid-May.

Speaking after the release of the results, in which SA’s sugar tax wiped R42.3m off the firm’s interim earnings, Vorster said: “It is exciting to see the interest in Clover as this is testament to what we have achieved to reposition the business and enhance its value”.

Subdued consumer confidence, deteriorating disposable household income, sugar tax and higher fuel costs loomed large over the company’s performance in the six months.

Clover’s revenue increased by 4.1% to R4.4bn but net profit fell by 0.3% to R232.5m. Headline earnings per share increased by 5% to 123.5c.

Frank Kahumba, an analyst at Momentum Securities, said fuel price increases piled pressure on already weak consumer spending, making it difficult for Clover to pass the rising costs to consumers.

Clover will need to find the right balance between price and cost to protect its margins and earnings, Kahumba said. It is already moving in the right direction by seeking growth through product and brand development, cost management and production efficiencies, but it might be too early to be in positive territory, he said.

Little was known about the CBC other than it had done well in the regions it operated in “without external influences of investors and might like to continue on that same path”, he said.

Clover was better off with the consortium because it would offer benefits such as access to funding, economies of scale and expertise,  Kahumba said.

Clover’s shares were on Tuesday down 1.63% to R22.28.