The fruit canning factory in Ashton, Western Cape, constitutes approximately half of South Africa's canning industry, says Jacques Jordaan, CEO of the Canning Fruit Producers' Association: if it closes down, the whole industry is at risk. If the loss-making canning factory and home to legacy brand KOO were closed, as its owner, the food conglomerate Tiger Brands, had been contemplating, entire farms would have gone under and the rug pulled out from under the eponymous town.
Right: yellow cling peaches grown for canning
Last week Thursday, at 8pm, a contract was signed between the Langeberg Foods Pty Ltd (owned by the Ashton Fruit Producers' Cooperation) and Tiger Brands with the exchange of a symbolic one Rand to seal the deal.
Henceforth, the new operator will be Langeberg Food Pty Ltd, which is owned by the farmers represented by the Canning Fruit Producers' Association. "For most of its existence, the factory was owned by the producers until Tiger Brands bought them out. Now, after many years of uncertainty, the producers are integrated into the value chain again."
The producers invested in conjunction with a Norwegian equity partner, wishing to remain anonymous. A community trust will also be established to include for the benefit of factory and farm workers. Tiger Brands made a R150 million (7.4 million euros) contribution together with the Norwegian equity partner and the Ashton Fruit Producers Association for startup capital. Despite the deep uncertainty, the factory never stopped production: 85% of the canned fruit is exported. South Africa is internationally renowned for having the best quality canned fruit in the world, he says.
Operating capital is between R800 million (39.5 million euros) and a billion Rand per year, but the costs to closing the factory would have been equally heavy in terms of staff pay-outs, Jordaan remarks. Not to mention the impact on another legacy brand owned by Tiger Brands Mrs Balls' Chutney whose key ingredient, dried peaches, are dried at Ashton.
A South African legacy brand
Sword of Damocles hung over orchards
For years the farmers who take their fruit to Langeberg & Ashton Foods have been asking themselves whether they ought to uproot the orchards they'd planted with the peach, apricot and pear cultivars especially suited to canning, which is to say fruit that ripens with high colour and sugar, picked at its prime and immediately processed. In other words, cultivars rather bred for taste rather than a long shelf life, rendering them unsuitable for export.
In fact, Jordaan adds, the quality and cosmetic appearance requirements of the fruit used for canning are as stringent as those of retail buyers of fresh fruit.
"The knock-on effect of that factory in a traditional [wine] vineyards area with stonefruit, often plums, and of course citrus has started in a big way," he explains. "So when you pull up 2,000 hectares in a year or three and you replace it with more wine grapes or more plums, you'll be flooding those markets. Immediately, you'll be creating surpluses disastrous for those industries."
A diversified future
Jordaan observes that the other half of South Africa's canning industry, Rhodes Foods, has been exploring diversified avenues with success, and it's a model that could be further pursued at Ashton. Over the past two years, tomatoes had been taken in to keep the factory busy year-round.
The core business remains fruit canning, he says: apricots, peaches and pears from November and March, and guavas at this time of the year.
For more information:
Jacques Jordaan
Canning Fruit Producers' Association
Tel: +27 21 872 1401
Email: [email protected]
https://cfpa.co.za/