COMPANY NEWS IN BRIEF

Africa's Jumia pairs with Zipline

Africa-focused e-commerce business, Jumia Technologies, has partnered with a drone-delivery startup to carry household items to remote areas of Ghana.

The venture will combine San Francisco-based Zipline's automated delivery system with Jumia's distribution network to deliver products such as electronics, cosmetics and fashion.

Zipline currently offers drone delivery of blood, vaccines, and other medical equipment. It's active in in Ghana, Rwanda, Nigeria, and the United States, with its most recent foray into Japan.

A Jumia spokesman said the partnership was part of a plan to reach a growing customer base in rural and remote areas, which make up about 27% of the company's deliveries.

The spokesman said he could not immediately give financial details. Nevertheless, the loss-making company will be hoping the initiative helps profits take off.

In August Jumia said it expects full-year losses, before interest, tax, depreciation and amortization, of between US$200 million and US$220 million. It did however say it was past peak losses.

Jumia was the first Africa-focused tech start-up to list on the New York Stock Exchange in 2019. It operates in 11 of the continent's countries and has a current market capitalisation of US$741 million, according to data from Refinitiv.-Reuters

SafriCanna sells all its output to Europe, Australia

Booming demand for medicinal cannabis from Europe to Australia has seen a South African producer sell all of its output for next year in advance.

SafriCanna signed sale deals with Germany and Australia for the bulk of the production, Bassim Haidar, chief executive officer of its largest investor, Optasia, said in an interview. The company started construction of its facilities in the capital, Pretoria, in 2019 and shipped its first flowers in June.

In the same month, it agreed with German-based DEMECAN to supply medicinal cannabis flowers.

To meet rising demand, SafriCanna aims to increase production fivefold by 2024. It will spend US$40 million on expanding its facilities in Pretoria to produce 25 000 kilograms of cannabis flowers a year from 5 000 kilograms currently, Haidar said.

The legalization of medicinal cannabis in more than 40 nations has led to an explosion in demand for a product that can be used to help treat nausea, Alzheimer’s and chronic pain.

SafriCanna is among a handful of African companies to have met the European Union’s strict good-manufacturing-practice standards, allowing it to export cannabis flowers as an active pharmaceutical ingredient to Europe, Haidar said.

The global medical cannabis market was worth US$26.1 billion in 2021 and is expected to expand at a compound annual growth rate of 10.4% through 2027, according to research firm IMARC Group.

A 51-year-old Nigerian-born entrepreneur, Haidar chose to invest in South Africa’s cannabis industry because of its infrastructure, cheap land and good climate, he said. According to Prohibition Partners, the country’s cannabis industry is predicted to be worth R27 billion by 2023.-Fin24

Final liquidation looms for SA Express

The provisional liquidators of SA Express (SAX) intend to apply for final liquidation of the state-owned regional airline, according to a letter to unions, seen by Fin24.

SAX went into provisional liquidation in April 2020 when a business rescue attempt failed. It has not operated since.

Repeated attempts to conclude a sale of the airline have failed, and in March this year the provisional liquidators announced the reopening of the bidding process. This attempt, however, also appears to have failed.

The provisional liquidators indicated in 2020 that the amount to be raised was R50 million. At the time, the sale by the liquidators of the airline's few tangible assets raised about R30 million.

The Fly SAX consortium, made up of former employees, offered R5 million for the intangible assets of SAX, which essentially comprised the licences and related routes.

However, early in August this year, the Air Services Licensing Council cancelled the licences of SAX on the grounds that it was not complying with the licensing provisions of the International Air Services Act. The loss of its licences means SAX has no intangible assets left either.

SAX has liabilities of more than R900 million. The Judicial Commission of Inquiry into State Capture's report made mention of various questionable dealings linked to the airline.

The Dynamic People's Union of South Africa (Dypusa) told Fin24 it is disappointed with the manner in which government handled the liquidation of SAX.-Fin24

Airports Company SA is not for sale

A number of prospective investors have expressed an interest in buying a stake in Airports Company SA (ACSA), but the state-owned entity, which runs the country's main airports, is not for sale, according to Transport Minister Fikile Mbalula.

"ACSA is not only a strategic national asset with an important role to play in South Africa's economic reconstruction and recovery, but also in enabling the growth of the aviation sector in Africa," Mbalula said in a statement on Friday.

"It is on this basis that the government has no intention to divest the equity it holds in ACSA, in favour of private shareholding in the foreseeable future."

Government owns a 74.6% stake in ACSA and the Public Investment Corporation holds 20%. The rest is held by a number of private investor groups.

"While it is true that ACSA has been severely impacted by the Covid-19 pandemic as a result of travel restrictions, it remains on course on the recovery path," said Mbalula.

"We will continue to engage with investors with a view to direct these investments to projects that we believe will add appropriate value to our service delivery mandate across the sector, and not equity. The aviation sector has massive potential for investment and we encourage investors to take advantage of the opportunities it presents."-Fin24