ALG Estates celebrates its 250th anniversary

The family has been in South Africa for thirteen generations.Citrus was introduced to the valley between the Ceder and Olifants River mountains more than a century ago, and the Van der Merwe family’s farming activities became centred on citrus. In 1974 the three brothers, Alwyn, Lieben and Gerrit (hence ALG), formed ALG Estates, a brand which brought together the production of the three farms, for more bargaining power. In 1998, with the deregulation of fresh produce marketing in South Africa, the company started doing its own marketing. 

The theme of the evening was ‘The family-owned farming enterprise in Africa’. “The greatest thing we can do, is to create hope for our people in South Africa,” says Gerrit van der Merwe Sr. “We’re totally reliant on the quality of our people.” The company is particularly human resources-focused and its black empowerment initiative, Cedar Citrus, started in 2002, is a social as well as a business success. “Cedar Citrus has been the most successful farm in our stable for the past four years,” says Gerrit van der Merwe Jr. He is one of four directors of Cedar Citrus. Dirk Dirks, another director who represents the workers, together with Tiekie September, calls it a privilege to have been part of this opportunity. “Last year was a very good year for us, about 90% of our citrus was exported. We’re going to expand the current 36ha with another 20ha of Cara Cara navels. I have a passion for farming, and we’re like a happy family.”

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In his tribute to the company, Charl Senekal, one of the largest sugarcane farmers in Africa, mentioned that ALG grows 41 varieties, a figure perhaps not surpassed by any citrus grower in the world, nor its capacity to deliver citrus during every single month of the year. They produce, pack and market approximately 18 000t of citrus annually and seek to specialise within the citrus sector. Therefore, they’re not looking to diversify with other crops, but rather be able to deliver small volumes of high-value, unusual citrus (like Tahiti lime, not widely cultivated in South Africa) to their client base. “As a business you want to grow but you don’t want your client base to grow. We would rather just add one pallet of something we know has a small market, than plant 2ha of it and then have to find a new buyer. Supermarkets also prefer to deal with as few suppliers as possible,” explains Van der Merwe Jr. 

Currently their citrus portfolio consists of roughly 40% navels (a category in which they’re establishing new plantings, not a trend across the South African citrus industry), 30 to 35% soft citrus, 10 to 15% Valencias, 5% lemons and 5 to 10% speciality citrus. As to the other types of speciality citrus varieties they grow, they’re playing their cards close to their chest.

The company is also unusual in the extent of its local marketing (it only exports 60 to 65% of its production). It delivers the largest volumes of citrus, with the exception of ClemenGold mandarins, to high-end retailer Woolworths, with whom it has had an 18-year relationship. (In turnover, ClemenGold producers’ citrus delivery to Woolworths is the largest.) Its citrus comes from three production areas within a 75km radius, each with its own microclimate.

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“For the past two years we’ve been preparing to brace ourselves for the storm, to find ways to hedge against possible oversupply on the market, through horizontal and vertical diversification,” says Van der Merwe Jr. “We firmly believe you have to use the entire crate.” To that end they built a juicing facility in 2001. This facility produces juice concentrate, citrus oil and ground peel for animal feed. The juice facility has just been extended to process 21 000t of class 3-fruit annually through the installation of a new, South African-designed evaporator that can handle 7 500 litres per hour. 

The company has been Fair Trade accredited for seven years in a row and through this has managed to allocate close to a million Rand for educational and sports facilities. “Community upliftment gives purpose and focus to our company,” states Gerrit van der Merwe Junior. Job creation is another pillar of ALG and for that reason they purposely do not overmechanise through automatic sorting machines and the like. There are three company-owned pre-schools which also provide meals to the young children of employees, as well as aftercare to schoolchildren. 

Prof Mohammed Karaan, dean of the Faculty of AgriSciences and acting vice-rector at the University of Stellenbosch, in his address on the challenges and possibilities of agriculture and trade in Africa on the evening, said: “When you at ALG speak about your business, you have a twinkle in the eye. To me that’s the most important factor you need to survive in Africa: a twinkle in the eye. Don’t get too despondent. The complexities of agriculture in Africa is significantly offset by its latent possibilities.”

For more information:

Gerrit van der Merwe Jr

Tel: +27 22 921 3439