South African Business 2020 edition
A unique guide to business and investment in South Africa. Welcome to the eighth edition of the South African Business journal. First published in 2011, the publication has established itself as the premier business and investment guide to South Africa. Regular pages cover all the main economic sectors of the South African economy and give a snapshot of each of the country’s provincial economies. A special feature focusses on the huge potential for growth and job creation which the tourism industry holds. The possibilities presented by the age of renewable energy for the mining industry is the topic of another special feature and the CEO of Minerals Council South Africa responds to a set of questions on the state of mining in the country. South African Business is complemented by nine regional publications covering the business and investment environment in each of South Africa’s provinces.
A unique guide to business and investment in South Africa.
Welcome to the eighth edition of the South African Business journal. First published in 2011, the publication has established itself as the premier business and investment guide to South Africa. Regular pages cover all the main economic sectors of the South African economy and give a snapshot of each of the country’s provincial economies. A special feature focusses on the huge potential for growth and job creation which the tourism industry holds. The possibilities presented by the age of renewable energy for the mining industry is the topic of another special feature and the CEO of Minerals Council South Africa responds to a set of questions on the state of mining in the country. South African Business is complemented by nine regional publications covering the business and investment environment in each of South Africa’s provinces.
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OVERVIEW<br />
Food and beverages<br />
Small municipalities are struggling to supply services to processors.<br />
SECTOR INSIGHT<br />
PepsiCo has bought<br />
Pioneer Foods.<br />
Two of the best-known large companies in <strong>South</strong> Africa’s food<br />
and beverages sector were purchased by international companies<br />
in 2019. The involvement of PepsiCo (which bought<br />
Pioneer Foods) and Central Bottling Co of Israel (which made<br />
on offer on Clover) confirms that the idea of <strong>South</strong> Africa being a<br />
stepping-stone to the rest of Africa is still alive.<br />
Pioneer Foods, which makes and sells a wide range of products<br />
from bread, cereal and fruit juice to spreads and pies at various locations<br />
around the country, sold for R24.4-billion. Clover is a listed dairy<br />
company which in 2017 produced 554-million litres of milk and had<br />
revenues of R10-billion.<br />
Clover’s action in 2019 in closing three small-town plants in rural areas<br />
illustrated a less positive aspect of <strong>South</strong> <strong>African</strong> manufacturing: the inability<br />
of small municipalities to adequately supply services to companies.<br />
Clover moved production to Port Elizabeth, Durban and Johannesburg.<br />
Poultry producer Astral’s appeal to national government eventually led<br />
to positive results in the Mpumalanga town of Standerton after water<br />
and electricity had become scarce commodities.<br />
Food and beverages make up 26% of the <strong>South</strong> <strong>African</strong> consumer<br />
products sector, just ahead of agri-business (25%), diversified companies<br />
(23%) and sugar producers. Between 2009 and 2016 the sector<br />
grew by 2%. Most recent capital expenditure has targeted improving<br />
ONLINE RESOURCES<br />
Agricultural Research Council: www.arc.agric.za<br />
FoodBev SETA: www.foodbev.co.za<br />
National Agricultural Marketing Council: www.namc.co.za<br />
Perishable Products Export Control Board: www.ppecb.com<br />
efficiency rather than expansion<br />
of production.<br />
The food and beverages<br />
sector employs about 230 000<br />
people. Beverages account for<br />
just over 4% of all manufacturing<br />
sales while food is responsible for<br />
13.5%. Within the sector, beverages<br />
accounts for 24% of sales. One<br />
quarter of the 37% of national GDP<br />
that is generated by agri-industries<br />
derives from agri-processing.<br />
Gauteng, the Western Cape<br />
and KwaZulu-Natal are the leading<br />
provinces, with half of the companies<br />
in the sector in Gauteng. There<br />
are about 4 000 food-processing<br />
companies in Gauteng, employing<br />
more than 100 000 people.<br />
Global consumer goods company<br />
Unilever has invested nearly<br />
R4-billion in recent years. This highlights<br />
a trend across the food and<br />
beverages sector. In 2016, Nestlé<br />
<strong>South</strong> Africa invested R1.2-billion in<br />
adding instant coffee to the products<br />
it makes in <strong>South</strong> Africa.<br />
By volume and value, the<br />
Joburg Market is the biggest in<br />
Africa. There are 55 cold rooms<br />
that can accommodate 4 561 pallets<br />
of fresh produce at any one<br />
time. An average of 10 000 buyers<br />
congregate daily on the market’s<br />
65 000m² of trading space.<br />
SOUTH AFRICAN BUSINESS <strong>2020</strong> 82
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