Louis Dreyfus Commodities BV, a closely held commodities trader, and NWK Ltd., a South African agricultural company, bought a Zambian cotton ginner for an undisclosed amount.
NWK, 58 percent owned by farmers, will take a 60 percent stake in Dunavant Zambia (Pty) Ltd. and Louis Dreyfus will have a 40 percent share, Johan Bezuidenhout, a spokesman for NWK, said by phone today from Lichtenburg, South Africa, where the company is based. Dunavant operates seven cotton gins in the southern African nation. Both buyers declined to say how much they paid. Ginning involves removing seeds from cotton and spinning the fiber into threads.
“We see opportunities for growth in Zambia,” Bezuidenhout said. “There are about 300,000 small-scale farmers in the country and we would like to help them increase their productivity.”
Investors have sought new markets as economic expansion in development markets slowed. The International Monetary Fund estimates sub-Saharan Africa will grow 5.7 percent in 2013, the highest regional expansion rate after developing Asia. Zeder Investments Ltd., a Stellenbosch, South Africa-based investor in agricultural companies, in March paid 276 million rand ($32 million) to take a controlling interest in Chayton Atlas Investments, a company that buys and develops commercial grain farms in Zambia.