A LG E S TAT E S
ALG ESTATES
A Fresh Approach
to Citrus Export PRODUCTION: Timothy Reeder
ALG Estates in Citrusdal is found in the fertile upper reaches of the Olifants River Valley, and forms part of the heartland of the Western Cape citrus industry. As one of the leading citrus farms in the region, ALG boasts an extensive estate comprising a number of citrus farms and a proud tradition spanning more than two centuries.
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INDUSTRY FOCUS: AGRICULTURE
GERRIT VAN DER MERWE
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ALG ESTATES
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The ALG Estates themselves can be traced back to the founding years of South Africa and the Dutch occupation of the Cape. Indeed, the gable of the original homestead on one of their farms, Karnemelksvlei, the oldest house in the valley, was built in 1767 by the forefathers of the Van der Merwe family. Fast forward to the present day and the three Van der Merwe brothers - All, Lieben and Gerrit - lend this familyowned business its name, having taken over from their father Gert and founded the Estates in 1974. “Farming has been taking place for about eight generations in the Citrusdal valley,” Gerrit Van der Merwe explains to us of the company’s rapid rise. “When we three brothers took over the business from our father we began to expand on the farming side. Then, in 1998 we started our own marketing organisation, and through this all we were expanding constantly; we also owned a fertiliser facility which has been joined by our expansion into a logistics company as well. “On the farming side, back in 1994 there were four production units; at the moment we have between eight and nine in four different production areas within a 130 kilometre radius. The aim of this approach is to be able produce the same products but with a longer consumption window. By using different production areas, we are able to control the produce to yield two or three weeks later or earlier than we currently have.” Being privately controlled means that the Estate is capable of hands-on management, which enables stringent quality control of its products. It is structured in such a way as to be able to serve special niche markets and to adjust rapidly to customer demands, whether this is with regard special packaging or other diverse needs. As Van der Merwe explains, the business has seen rapid growth since its concerted focus on increasing production. The size that the farming operation has now attained has
//WE HAVE ALSO DOUBLED THE CAPACITY OF OUR JUICING FACILITY TO ACCOMMODATE OUR GROWTH// necessitated wide diversification and expansion at various levels, using modern management approaches and scientific farming methods in order to fulfil the greater demands placed on the organisation. “In Africa, one of the key objectives is to create economic wealth of the community around you, and therefore to provide jobs,” states Van der Merwe. “This is a real priority for us, and as a result we have expanded our production facility so that we can pack more of our own product, which in turn creates jobs. We have also doubled the capacity on the juicing facility on the processing side, in order to
accommodate this growth. “We are looking to expand by around 10-15% per annum over the next 10 years, so the packaging facility is not the last facility that we are going to build. The citrus industry is very labour intensive, and brings foreign currency into a country - both of these are beneficial from an African point of view as it creates jobs for every hectare that we expand.” On the whole, farming operations at ALG Estates are highly mechanised and include scrupulous orchard management with computerised irrigation. Fruit picking is undertaken solely by hand and transported to ALG’s
Quantum Forklifts is proud to support ALG Estates Quantum Empowerment Forklifts (Pty.) Ltd., was established by the shareholders of Yadah Forklift Enterprises CC Trading as Quantum Forklifts, mr. W.P. and me. K. van der Merwe, as the empowerment arm of their existing business which operate and manage 92 forklifts in an area which include Citrusdal (the ‘Hub’ of operations), Op Die Berg - Ceres areas, Clanwilliam, Vanrhynsdorp, Klawer, Porterville, Vredendal, Lutzville, Piketbergberg, Morreesburg and surrounding areas. Citrusdal is ideally suited to provide these essential services and support to farming concerns and industries, as witnessed by the growth of their operation from humble beginnings in 2009/10 with nine forklifts to 92 currently. Empowerment: Mr. and Me. van der Merwe’s vision includes a strong focus on their Business being a responsible citizen of the community and contributing to wealth creation and development of the community. To this end the employees’ potential were, and are, developed to acquire skills to service and repair forklifts when called upon to do so. To further this goal, four service vehicles, equipped with the necessary parts, equipment and tools, are available and managed by in-house trained technicians to provide efficient service within 24 hours. Products handled are perishable and need to reach its destinations in as fresh a condition as possible. Should farmers/warehouses/industries in the areas enumerated above, rent forklifts from the Cape Town area, the transport and handling costs alone, may be in the region of R 10 000. Quantum’s rental conditions make provision for the client to accept responsibility for daily routine maintenance, to insure the forklift and to pay the rentals as agreed (normally 30-days). The forklifts are refurbished annually, which includes respraying, in order to gain maximum lifetime for each vehicle (up to, but not limited to 10 years). Extending the efficient operating lifetime of the forklifts, without the further loan repayment expense significantly increase the operating profit overall.
Cell phone number: +27 83 683 1540 Telephone number: 022 921 3823 Email: Quantumforklifts@telkomsa.net
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INDUSTRY FOCUS: AGRICULTURE
own Packhouse, where it is then graded according to quality and size before being treated to prolong shelf-life. Accordingly, the company’s headline investment in recent times has been the R180,000,000 plunged into upgrading its packaging plant, as well as two new production units to bolster its present capabilities. Also forming a significant aspect of ALG Estate’s growth plans is its Black Economic Empowerment project, named after the mountain range in the region: Cedar Citrus. It is the Western Cape’s first redistribution program for previously disadvantaged communities,
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and sees ALG covering all running costs until the orchards are in production. Cedar Citrus started in 1999 through a unique co-operation between 36 farm labourers, where every individual received his own share of citrus land. In the first year 24,000 trees were planted and a further 12,000 where planted in 2002. “This has expanded by 60%,” says Van der Merwe, “and we were very grateful for the financial aid from the Western Cape government which was integral to our being able to plant these trees. The project currently stands at 36 hectares and will soon be up to 55
hectares, and the idea is for them to have 100 hectares ultimately. This, for us, constitutes a standalone production unit. Then, once they have established a good, effective production unit, we will look to get them involved in the chain in the packhouse and marketing sides.” Locally ALG products are transported to destinations as far afield as Johannesburg, Port Elizabeth and Durban, mainly by means of its own fleet of transport vehicles, thus enabling the Estate’s products to be distributed to supermarket shelves within days. Crucially, however, ALG is also perfectly situated to facilitate the export of its
ALG ESTATES
products as well as the prompt servicing of local markets. Cape Town’s export harbour is only two hours’ drive away, and ALG can deliver pallets of citrus for export to cold storage rooms within days of picking. “We are very locally-focused,” explains Van der Merwe, “and Woolworths is our biggest customer. That said, 65% of our product is exported at present, because we simply do not have the strong local markets found in places like the Far East, for example. I am confident that the South African industry is going to grow, from 100 million cartons to 150 million
cartons, but we will be looking to grow primarily in big markets like China, Bangladesh and India, where there is an abundance of people for us to serve.” He finishes by outlining what will constitute the company’s growth plans for the months and years ahead. “Africa is also an option, of course but it is a tricky one due to the dependence on oil and other issues when looking to enter this market. We are on a slightly different pedestal as many of our products are ready late, well-into the summertime, which does make Africa quite lucrative for us due to its demand for these products. Our main focus will
stay in the western world, in the US and Europe, trying to do what we do and doing it better. “The world is big, so hopefully it can accommodate our growth,” he concludes.
ALG ESTATES 022-921 3439 www.algestates.com
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AFRICA
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Issue No.61
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JEGIE PADMANATHAN:
People Are The Power
of Bidvest Prestige ALSO IN THIS ISSUE:
CCI South Africa / Thebe Tourism Group / RPP Developments / ALG Estates
A S F E AT U R E D I N
ENTERPRISE AFRICA
AUGUST 2017