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Pieter Karsten - Karsten Group
"South Africa: "We needed to extend production to keep our customer base happy"
Karsten was started back in 1968 on Kanoneiland west of Upington, along South Africa's Orange River, where they started with raisins - this didn't work out and production was later changed to table grapes. In 1980 they bought the farm Roepersfontein, which is now The Karsten Group’s headquarters.
"The Western Cape is becoming a bigger part of the production," explained Deputy CEO Pieter Karsten. "We needed to extend production to keep our customer base happy. 70% of our production is from the Northern Cape, but we also grow in Piketberg, the Hex River and Robertson too. We want to extend the season as long as possible but there are obviously some limitations; you can't go much earlier because you get issues with quality and production. We start at beginning/middle of November and we can supply white grapes till the end of March, and red right into May."
Closer ties to Europe
The group partnered up with Timerfruit back in 2014 in order to be closer to the European market.
"Our preference is to work as directly as possible with the customer," according to Pieter. "There is a lot of risk for us as well as for the customer, but also there are a lot of smaller customers who need a bit more personal attention, which is hard to do from South Africa.
Irrigation channel in Kakamas
"We deal with other growers to bring down the cost of supply, as the value is in the product. When you rely on other service providers there is more risk involved so we prefer to do it ourselves. Service provision is not a big driver for making profit, it is about making profit on the farms and if you don't have the right supply chain then you won't succeed. It is not about the extra Euro you can make, it is about the Euros you don't lose along the way."
Pieter says it is going to be more difficult for the traditional exporters in the future. He says they will need to understand their customers and suppliers better or they will always be squeezed, but the very good ones will survive. "Growers have more options now and they want more that just a shipper. There are still a lot of growers who just want to grow and give the product to people they can trust."
Pieter talks a lot about responsibility, not only social responsibility but also responsibility to produce a good product and add value to that product, also a responsibility to his country.
After deregulation a lot of new middlemen just kept dropping prices and a lot of growers lost their businesses, so it is our responsibility in the trade to add value.
"South African growers are under a lot of pressure due to our social responsibilities. At Karsten we have been looking after our workers since way before the Black Economic Empowerment came in. We have to able to supply jobs for our people and look after Africa. Retailers also need you to be socially compliant."
"We work on the philosophy of not cutting jobs in order to make a profit, but to keep our workers and pay them a fair wage. To do this we need to expand and explore new products. We recently planted more citrus which will allow us to have a longer production window. One of our biggest problems is labour; we only employ 20% of our people permanently, with more products we can employ them for longer periods."
Karsten has had a long relationship with Albert Hein, "They are one customer who have really put their money where their mouth is," explains Pieter. "Together we are sponsoring a lot of community projects and schools. Education is our country’s key to success."
The Orange River and vineyards from the air
There are big plantings of grapes going on in South America, especially Peru, but Pieter thinks there is place for most of it. Grapes are a long term, capital intensive crop. To be able to survive you would need to be the best and make sure you have a competitive advantage
"95% of Karsten's export to the UK is of their own production, so they need to communicate with the supermarkets. "They do try to do their best and we have to work together as it works both ways. This year we are suffering due to the exchange rate, but it can also be the other way round. It comes down to transparency."
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