Lonrho Plc (LAF), a U.K. holding with stakes in transportation and agribusiness companies in Africa, said a deal by its Oceanfresh unit to supply seafood to Wal-Mart Stores Inc. (WMT) will double its sales in the U.S.
The agreement to sell South African wild hake filets to 500 Wal-Mart stores “is potentially doubling our business in the U.S., as we already supply 435 stores owned by Costco Wholesale Corp. (COST),” Chief Executive Officer Geoffrey White said in a phone interview from Lonrho’s London headquarters today.
“We are seeing continuing demand from retailers in the U.S. for South African produce, and this deal will grow Oceanfresh’s revenue nicely,” White said.
Oceanfresh, 51 percent-owned by Lonrho, will add more than 100 jobs in South Africa as a result of the deal, according to a regulatory filing today.
Lonrho’s agribusiness division, which includes Oceanfresh, accounted for about half of the company’s first-half revenue of 61.1 million pounds ($99.5 million), according to data compiled by Bloomberg. Oceanfresh “forms a significant part” of the agribusiness unit, White said.
The Wal-Mart deal will not affect other global supply agreements signed by Oceanfresh, which is 41 percent owned by management, White said. The company supplies all the major retailers in South Africa, plus others in Canada and Asia, he said.