African market has most opportunity for growth

Tru-Cape is one of the biggest apple growers and distributors in South Africa. The company is fully owned by growers. Like other South African companies, Tru-Cape has had to cope with complications due to weather conditions.

Roelf Pienaar, managing director of Tru-Cape Fruit Marketing says: “It’s probably the worst drought in years. This will obviously have an impact on our volumes. In certain areas, and on certain varieties, we could be up to 20% down compared to last year. It all depends on the area. We are fortunate to procure our products from two different areas, each of which have their own micro-climates. This way we can compensate depending on the area, but when put in perspective of the whole year, volumes are going to be an issue. Due to the fact that we have different growers in Ceres and Grabouw our volume year-on-year is stable."

Conrad Fick, marketing director at Tru-Cape explained, “While our growers in the region of Ceres have been hit hard, this isn’t the case in all our locations. When you look at our production areas in the Grabouw-region, you notice that there haven’t been any problems caused by drought at all. Production over there is normal.”

The heat also has had effect on the sizes of the apples, though Roelf mentions that there have been some cold days as well, which should help. According to Roelf, the main concern is water. “The water supplies are running low. South Africa has always been a country where water is scarce, but right now this has become an especially big issue. This year we should do fine, but next year this may lead to a diminished production.”

20% of Tru-Cape’s production is for export within the African continent. Shipments are sent to countries like Zimbabwe, Nigeria and Angola. 70% of this export consists of the Golden Delicious-variety. “The main challenge on the African market is that it isn’t regulated as well as in Europe. One issue for example is credit risk. You have to make sure you’re getting paid. The fact that oil prices have gone down compared to previous years definitely had an impact on the African market. In spite of this, Africa is still a very important market, especially Nigeria.” says Roelf.

“Another problem is infrastructure. Some roads in countries like Lagos are completely congested with traffic, which causes transport to be gridlocked. So export in Africa does have its issues,” adds Conrad.

According to Conrad, the European market is still quite important. “Europe always has been important to us as a market for pears. In general the prices are the same as last season, but now the current exchange rate benefits us. We do not really send as many apples to that market, though.”

“We also sent shipments to China, but not as much as people predicted,” says Roelf. “I think there are huge opportunities for pears in China, but that market hasn’t opened up for pears yet. Unfortunately, our apples lack the right size for the Chinese market. Seven years ago, China used to be a target market for our company. But in the last couple of years it has become clear to us that the African market is the one that has the most opportunities for growth.”

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