Aramex expands in Africa with PostNet

Dubai-listed Aramex has expanded its African footprint with the acquisition of PostNet, South Africa’s largest privately owned printing and shipping service. Aramex bought a 100 per cent stake in the company, in a deal valued at US$16.5 million, from the current owner OneLogix Group.

“As we continue to scale Aramex into new growth markets and bridge trade corridors, this acquisition will expand Aramex’s volume of business in Africa considerably,” said Hussein Hachem, the Aramex chief executive.

The acquisition will increase its e-commerce division, bringing in 287 PostNet stores that service 55,000 customers daily across South Africa.

Aramex will own the master franchise, but each individual PostNet outlet will continue to be owned and operated by the representative franchise. Each branch will offer Aramex B2C services, covering international and domestic express shipping in addition to its e-commerce Shop and Ship.

“Investing in growth markets’ e-commerce sectors is also part of our wider strategy to maintain Aramex’s position as an e-commerce market leader, which is why we are disciplined in our approach to potential acquisition targets,” said Mr Hachem.

“We will remain bullish on our outlook for future acquisitions in markets across Asia, the Middle East and Africa in particular, both to build our operations and strengthen our global footprint.”

Aramex reported third quarter revenues increased to Dh922m from Dh824m in the same period last year, while profits jumped 16 per cent to Dh69.5m.

The group said that the 12 per cent rise in revenues was driven by its international express and e-commerce operations following investment in infrastructure and innovative technology solutions.

Another key driver for growth is the southern African market, which Aramex first entered in 2011 with the acquisition of Berco Express, now known as Aramex South Africa.

Andy van der Velde, the chief executive of Aramex South Africa, said that the PostNet deal would add many more locations for customers to do business with Aramex. “[Aramex continues] to view South Africa as a highly attractive market with significant growth prospects and this acquisition is testimony to our long-term commitment to investing in the country’s sustainable development,” he said.

The Dubai Financial Market- listed company is also considering further acquisitions in West Africa as well as the Philippines and Vietnam, according to an interview with Bloomberg. Aramex had Dh3.2 billion in sales in 2013, and is aiming to complete as many as three deals a year.

“We have entered the final quarter of the year with strong momentum in our business, maintaining our focus on our global growth strategy,” Mr Hachem said.

Aramex shares closed up 0.65 per cent to Dh3.1.

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