For many years, the Capespan name has been synonymous with fresh produce from South Africa and during the past two decades Capespan has built a prominent international profile. The Capespan Group Limited (CGL) manages a global footprint of integrated business units offering a range of quality products, value-added products and related services in fresh produce internationally.
Tonie Fuchs is the enthusiastic and upbeat Managing Director of Capespan Group. At the Group’s Cape Town offices he spoke about the current areas of focus and exciting future prospects for the Capespan Group.
Capespan is focusing on a return to the company’s roots
“During the last few years the Capespan Group has undergone a distinct change in strategy and, following a thorough self-assessment of Capespan’s strengths, we are currently focused on returning to our roots,” explains Fuchs. “In this process we have studied who our customers are and whether we represent the market or the grower. The reality is that as a marketer of fruit Capespan has two equally important customers, namely their grower suppliers and their market clients. ”
Capespan represents the company’s own production as well as third party growers and while both are important for success, it became clear that in order to ensure that the company has a secure and reliable supply to cement their relevance in the market, they needed their own core product produced in strategic areas, which is why Capespan have recently expanded their own production.
“For every carton of fruit we move, whether it is our own or from a third party supplier, we realise that we have to look after the needs of both our market and our grower customers,” he stressed. “In pursuit of this goal, our current internal focus is on getting effective management and executive teams on the ground to clear the divisions between our sourcing and marketing functions and thus to provide the best service to both customers as efficiently and cost effectively as possible.”
He explained that Capespan also realises that their two customers want to work together as closely as possible. “Our relevance lies in our ability to connect our grower suppliers to our retail customers and in facilitating the close interaction between these two ends of the supply chain. We are therefore currently building on the culture of service delivery to create a single efficient and reliable Capespan footprint,” says Fuchs. “By doing this we aim to deliver a committed service to both our customers by maximising their returns. This principle applies to the supply process from and to all parts of the world.” Fuchs explained that each market has its own needs and that the company’s strategy is based on providing the particular needs of each of their markets.
Internal restructuring focusing on human resources, training and technology
Capespan has recently undergone an intense and in-depth internal restructuring process with the focus on efficiency and Fuchs adds that the company’s current record of increasing returns is a testament to the success of these initiatives. “We are implementing training and focusing strongly on developing our own technology to implement our own systems and efficiencies. We have spent 18 months mapping our technological requirements and developing our own internal, custom designed IT system.” The system is expected to be implemented in the New Year and Fuchs is confident that this will assist Capespan in providing a competitive valuable proposition on the table for both their customers.
“During the next six to 12 months there will be a good deal of activity and change within Capespan, focussed on our single mission to get back to our core business which is the reliable supply of fruit with maximum returns to our grower supplier customers. We plan to simplify the complexities of this process and we are measuring our performance critically in the successful pursuit of this goal. Our new, simplified solutions, enabled through technology and a globally aligned team, will provide both our customers with improved service levels through a fully transparent, scaleable and cost effective supply chain. In short, we will be able to provide our customers with a service platform where they are able to transact as directly as possible from both ends of the supply chain.”
South African Production Units
Capespan owns a number of citrus and deciduous fruit production units and although the company has done so for many years, an important part of Capespan’s reassessment during the past four years was whether a company that undertakes marketing, as Capespan does, should also be farming. “After engaging with our customers, we now know that producing our own product was vital to complement our fruit basket offer and to provide us with an ongoing competitive edge in the market,” says Fuchs. “We have prioritised the fruit farming division and created a stand-alone production division, Capespan Farms. The strategies between the marketing and production divisions are completely integrated, particularly with regard to what to plant for which markets as well as how the farm productions fit into the marketing strategy.”
Capespan has sourced and invested in highly efficient fruit production teams to manage and improve the farms and over the past four years Capespan has invested around 1 billion ZAR in improving and expanding the company’s farming assets and the production capacity of the farming division. The production focus is currently on Capespan’s three core commodities, top fruit, grapes and citrus.
All the farms are strategically positioned to enhance Capespan Group’s service and product offering to all their third party growers and retail customers. Capespan enhances and adds to its significant third party grower basket through its own production in order to ensure a sustainable twelve month supply of quality product.
The table grape production capacity has seen significant expansions along the Orange River, both in South African and Namibia, and Capespan has a supply of grapes from 1000 hectares in this region. Capespan manages the 500 hectares of the Namibian Grape Company (NGC) vineyards on behalf of the Namibian government at Aussenkehr and the balance of 500 hectares is from the company’s own farms along the South African Northern Cape Orange River production region, from Onseepkans in the West to Kakamas in the east. “The table grape plantings on our production units have recently been expanded considerably, mostly with exciting new varieties,” says Fuchs. “As most of these vineyards have started producing this season, this sharp increased supply with highly popular grape varieties will provide Capespan with a clear advantage within the market.”
During the past few years Capespan purchased Theewaterskloof Farm (mostly top fruit with some stone fruit) at Villiersdorp. The company has also invested heavily in the renewal of their Applethwaite Farm (top fruit) at Elgin where they have planted an additional 100 hectares which will start producing in the next few years. “This will increase our own top fruit production to around 500 hectares. We also invested in a top fruit packing and cooling facility, Novo Pack House in Paarl, with a capacity to pack and store 120 000 bins,” explains Fuchs.
Capespan owns Penhill Farm (citrus) at Addo in the Eastern Cape and more recently the company acquired another citrus production unit, Groot Patrysvlei, at Clanwilliam. As a result Capespan has 350 hectares of citrus production. Fuchs added that through assisting their suppliers throughout South Africa with licencing and other inputs, they will also soon be marketing soft citrus on behalf of suppliers from approximately 1000ha of mostly soft citrus.
Fuchs stressed that while Capespan is a global company, they are using their South African production supply base as a core, complemented with third party South African fruit to lengthen the supply period. In addition to this, their supply is further complemented and lengthened with Chilean, Peruvian, Egyptian and Indian fruit.
The Capespan Group’s current focus on returning to their original focus of supplying reliable fruit coupled with their massive recent investment in fruit productions which are now starting to bear fruit, have ensured that this group is very well placed for success in the near future.
By Louise Brodie
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