Fuelogic is a bulk liquid fuel transporter operating in Southern Africa under long-term contracts from customers.
Its operations include the primary distribution of fuel from refineries and import facilities to terminals, depots and large customers; secondary distribution of fuel from terminals and depots to customers; and the transportation of liquid petroleum gas.
Although the demand for fuel has softened on the back of suppressed economic conditions, the long-term forecast for fuel demand remains robust with significant growth opportunities available in the cross-border market. Accordingly, Grindrod made a strategic decision to expand its existing service offering in the petrochemical sector.
The acquisition will result in increased critical mass and the associated benefits of economies of scale; reduced earnings volatility and increased diversification of the existing transport operation which has a large weighting towards the automotive and dry bulk market segments; and it will provide a platform for the expansion of the operations into the Southern African Development Community region.
The purchase consideration of ZAR160 million will be discharged in full in cash.
All conditions precedent to the transaction, including the approval of the Competition Commission, have been met.
Fuelogic will be a subsidiary of Grindrod.
