OVERVIEW Agri-processing
OVERVIEW Agri-processing Manufacturers are harvesting the Eastern Cape’s excellent produce. SECTOR INSIGHT A fibre manufacturing project has been started in Butterworth. • Mohair is a globally popular luxury product. Agri-processing is one of the key planks of the Provincial Economic Development Strategy of the Eastern Cape Department of Economic Development, Environmental Affairs and Tourism (DEDEAT). Part of the strategy is decentralisation, or locating facilities in smaller or rural centres. The Local, Regional and Economic Development Fund (LRED) is supporting a fibre manufacturing project in Butterworth with cashmere wool as the feedstock. The intention is to create jobs and revive the fibre industry in the Amathole District Municipality. Wool, mohair, citrus and pineapples, dairy products and salt are some of the products of the soil 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 and is the second-largest producer of citrus fruits. Famous Brands has 2 600 restaurants throughout South Africa, including the brands that made their debut in Port Elizabeth, Vovo Telo and Dulce Café. Famous Brands has increased its manufacturing footprint in the Coega Industrial Development Zone (CIDZ). Zone Three of the Coega IDZ is devoted to agriprocessing. 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 EASTERN CAPE BUSINESS 2018 48
OVERVIEW 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 central to this 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. Agri-parks will 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 industry is further expanding as producers tend to favour high-rainfall coastal areas such as the Eastern Cape. The bigger dairies include Coega Dairy which was founded in 2011 and is situated in the Coega IDZ. The Coega Dairy in the Coega IDZ produces the brand Coastal and sells milk to all parts of South Africa. It also manages the Famous Brands Cheese Company. which supplies product throughout the country. The province’s farmers mostly sell raw milk to two processors: Parmalat and Clover. 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 the current owner of the brand, Foodcorp, has increased production volumes. Cadbury Chocolates operates 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 Border Kei Chamber of Business: www.bkcob.co.za 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 49 EASTERN CAPE BUSINESS 2018
