The Singaporean government maintained its recent pace of direct investment into South African hi-tech companies when Temasek Holdings, its investment arm, said recently that it was paying $5,55 million (R39m) for a 12,5% interest in DNA Supply Chain Technologies, the recently listed fourth party logistics solutions specialist.
Temasek is the major shareholder in Southern Africa Investments Limited (Sail), the $100 million (R700m) Singaporean private equity initiative, with net assets of more than $45 billion (R315m). Companies listed in its portfolio make up 27% of the market capitalisation of the Singapore stock exchange and 10% of that country's gross domestic product.
The funds will be used to expand DNA's technology platforms. DNA, which recently reported maiden interim earnings of R14,9 million, is the continent's only listed fourth party logistics operator. Fourth party logistics is the latest development in the rapidly evolving logistics sector: DNA designs, operates and manages logistics solutions for companies that do not wish to tie up working capital in their in-house logistics function.
It draws on technology and intellectual capital and works with clients to optimise logistics in what it terms 'co-sourcing'. In contrast with conventional third party logistics operators, which are typically encumbered with storage, transport and distribution assets, DNA's solutions are based on avoiding the ownership of such assets.
Mark Kaplan, a Chief Joint Executive of DNA, said, "The fact that Temasek has selected us is indicative of what they're saying about DNA's potential." Temasek's investment should be seen as a 'foot in the door' in a business with huge opportunities going forward. It's not about cash, it's about a strategic partnership."
"We have a competence in emerging markets because we live and work here, so we have a global edge in emerging market conditions," he said. "The link with Temasek gives us global credibility and access and so, as we expand internationally, we'll do it with the credibility of Temasek, which is already an expert in our field."
Kaplan estimated that the growth rate in the local fourth party logistics market to be over 50% a year and that the market was already worth more than R1 billion.
Recently Prime Africa Investment, another Singaporean consortium established by Temasek, teamed up with Absa to invest R200 million in Secureco, a technology-driven security company.
Source: Business Day
© Technews Publishing (Pty) Ltd. | All Rights Reserved.
printer friendly version