OVERVIEW Agri-processing
OVERVIEW Agri-processing Manufacturers are harvesting the Eastern Cape’s excellent produce. SECTOR INSIGHT Famous Brands has made a second big investment in the Coega IDZ. • Cerebos salt company earned a top international food safety certification. Wool, mohair, citrus and pineapples, dairy products and salt—these are just a few of the abundant products of the fields of the Eastern Cape that manufacturers are turning into jerseys, scarves, jams, juices, cheeses, yoghurts and cakes of salt. The Eastern Cape has more livestock than any other South African province, produces close to a quarter of South Africa’s milk dairy farming and is the second-largest producer of citrus fruits. Famous Brands has 2 600 restaurants throughout South Africa, including the brand that made its debut in Port Elizabeth, Vovo Telo. Famous Brands has increased its manufacturing footprint in the Coega Industrial Development Zone (CIDZ). Zone Three of the Coega IDZ is devoted to agriprocessing. Thousands of tons of tomato paste is imported into South Africa every year so this acquisition will free up a lot of capital for Famous Brands. It also presents a great opportunity for Eastern Cape farmers to become suppliers to the plant. The Eastern Province Herald reports that the paste factory will be modelled on the successful Famous Brands Fine Cheese Company (formerly Coega Cheese) which has increased milk production from 16.5-million litres per year to 38-million litres. In addition, the Herald said that McCain Food SA has decided to source 60 000 tons of potatoes from the Eastern Cape, opening up another market for producers. Other tenants of the Coega IDZ include logistics companies like PE Cold Storage, River Edge Trading (which trades in sugar and syrup across Southern Africa) and Cerebos. Cerebos’s 30 000- ton per annum plant at Coega was awarded a top food safety standard certification on its 70th birthday in 2015, the FSSC 22000. The East London IDZ has two aquaculture tenants and the large Sundale Dairy, as well as a regional depot of the Mediterranean Shipping Company. The Eastern Cape Rural Development Agency (ECRDA) is active in helping small-scale farmers get access to markets and to become part of the agriprocessing chain. The implementation of Rural Enterprise Development (RED) hubs is a key plank of this EASTERN CAPE BUSINESS 2017 38
OVERVIEW strategy. RED hubs will supply tractors, harvesters and offer storage facilities and milling plants. There will also be opportunities for farmers to sell direct to members of their own community instead of shipping produce off to a distant location to be processed there. The first four hubs will be sited in the district municipalities of OR Tambo, Chris Hani and Alfred Nzo. The concept of agri-parks is also intended to support the addition of value to primary products: these have been developed at Lambasi, Ncorha, Sundays River Valley, Butterworth, Matatiele and Sterkspruit-Senqu. The Eastern Cape Development Corporation (ECDC) also has a role in supporting agriprocessing through loans and equity arrangements: projects that have received financial support include aquaculture, the production of dietary fibre from pineapples and bamboo products. The Eastern Cape provides approximately a quarter of South Africa’s milk, and the industry is further expanding as producers tend to favour high-rainfall coastal areas such as the Eastern Cape. With Clover recently acquiring Dairybelle’s milk assets, the province’s farmers mostly sell raw milk to two major processors: Parmalat and Clover. With the growth of the dairy sub-sector in recent years, a few independent processors have emerged. Small-scale dairy farming presents an opportunity to develop the industry in the former homeland areas, especially in a range of previously untapped products such as milk powder, speciality cheeses and long-life milk. Clover makes UHT/fresh milk in Port Elizabeth and Dairybelle manufactures natural cheese, processed cheese and speciality cheeses at its factory in Cookhouse near Somerset East. Ouma Rusks are still made in the small rural town where they were invented, Molteno, and current owner of the brand, Foodcorp, has increased production volumes. Cabdbury Chocolates operate a big site across the lake from the football stadium in Port Elizabeth and Nestlé makes 11 kinds of chocolate at its factory in East London. The Sasko mill in Port Elizabeth is the province’s only big milling plant. Coca-Cola Sabco and SAB Limited’s Ibhayi brewery are the major beverage manufacturers in Port Elizabeth and Distell has a bottling plant in the city. Sovereign Foods in Uitenhage is the country’s fourth-biggest producer of poultry and has been the target of a take-over by Country Birds for some time, but the process has been dragged out because Sovereign management do not want to sell. South Africa is the second-largest producer of chicory in the world. Chicory is grown primarily in the coastal areas around Alexandria between Port Elizabeth and Port Alfred. A drying plant has been established there and the dried chicory produced is sold to coffee manufacturers nationwide for local consumption. Sugar is grown on the northern border of the province, in North Pondoland. An opportunity for diversification in crop production exists with the aloe ferox plant, which is indigenous to the Eastern Cape. Like aloe vera, which is in demand worldwide in cosmetic and health products, aloe ferox is used for a wide range of skin conditions and various medical ailments. ONLINE RESOURCES Coega IDZ: www.coega.co.za Eastern Cape Rural Development Agency: www.ecrda.co.za East London Industrial Development Zone: www.elidz.co.za Nelson Mandela Business Chamber: www.nmbbusinesschamber.co.za Organic Agricultural Association of South Africa: www.organicsouthafrica.co.za Perishable Products Export Control Board: www.ppecb.com 39 EASTERN CAPE BUSINESS 2017
