Croc skin processor buys stake in Lone Star Alligator9 November 2012
Zimbabwe crocodile skin processor Padenga Holdings have bought a 50% stake in US firm Lone Star Alligator Farms for US$1.6 million as another option to diversify the company’s revenue streams.The Lone Star Alligator Farms, which is based in Texas, is an alligator farming business.
In an interview with The Financial Gazette's Companies Markets this week, Padenga Chief Executive Officer, Gary Sharp revealed the cost of the acquisition saying US$600 000 was paid up-front to show the company's commitment to the deal.
Sharp said the acquisition will allow Padenga to diversify products offered to the market.
“We will now be able to participate in the alligator skins segment of the market where we were not able to participate in before. This broadens our revenue streams,” he said.
Padenga was listed on the Zimbabwe Stock Exchange in December 2010. The company listed at US$0.05 per share and more than two million shares worth US$138,000 changed hands on its first day of trade.
The US company’s major customers are TCIM, the French exotic leather tannery and Heng Long Leather, a tannery based in Singapore.
Padenga suffered a 32% decline in the number of skins produced and sold during the year to June 30, from 62,884 the previous year to 43,049, slightly higher than the company's target volume for the year of 42,800 skins.
Pagenga Chairperson, Alexander Calder, however said he was happy the company was in line with its targeted slaughter despite the 32% reduction in skin production volumes.
“Revenue fell by nine percent as improved prices compensated for the loss of volumes. The number of skins produced and sold was however, in line with the group's target,” he said at the analysts briefing.
The crocodile breeder anticipates selling 42,000 large premium quality skins next year with large skins anticipated to drive growth in revenue.