Cerebos

COMPANY PROFILE

2015

Cerebos

www.cerebos.co.za | +27 (0) 86 010 4638

company profile

‘See how it runs’

Editorial: Harriet Pattison

The Cerebos brand was first established over 100 years ago with its very first factory set up in a village just outside County Durham in the UK. The company started a revolution in the salt production industry by introducing free-flowing salt and it wasn’t long before the Cerebos brand grew on an international scale, first established in the South African market during the 1960’s. With distribution now extending down to Southern and Sub-Saharan Africa, Cerebos is leading the South African retail salt market.

The fine line between how little or how much salt is good for you is increasingly marred due to frequent trials and new research being brought to light, but one thing that is for sure is how vital the addition of salt is to our diets, albeit in small amounts.

Even the Roman word for salt crystals, ‘sal’ is derived from the name of goddess of health, Salus – so, what exactly are the many uses of this all important mineral that was once as costly as gold?

Today, the value of salt has decreased immensely but commercial production is still fairly prominent, with 26 salt companies operating across South Africa today. It was announced in 2011 that South Africa accounted for 0.00125% of total production for that year where world production had reached an exponential 300 megatons.

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In the same year, the government reported local industry sales to be valued at R140.6 million while The Department of Mineral Resources recently stated that local sales have been rising by an estimated 6.83% per year over the last decade as a result of increasing salt prices and growing demand.

SALT CLASSIFICATION As with all minerals, salt is classified into different grades depending on its impurities content. Ranging from grade 1 to grade 4, much can be revealed from its shade, varying from purist white to a hint of grey or beige.

A s a l t ’s p u r i t y c o n t e n t i s l a r g e l y d e f i n e d according to the percentage of Sodium Chloride (NaCl) in the final product - a higher number equates to fewer impurities.

Cerebos

G e n e r a l l y, t h e i m p u r i t i e s f o u n d i n s a l t are other minerals and whilst they do not necessarily pose a risk, they do not present a n y k n o w n b e n e f i t s e i t h e r.

I n t e r e s t i n g l y, t h e f o o d i n d u s t r y o n l y c o n s u m e s a n e s t i m a t e d 3 0 % o f t h e w o r l d ’s t o t a l s a l t p r o d u c t i o n e v e r y y e a r, w i t h t h e industrial sector taking the predominant lead and using the mineral in all manner of s e c t o r s ; i n c l u d i n g p e t r o - c h e m i s t r y, p e t r o l refining, water treatment, in the production of cooling brines and even glass production.

Looking at the salt industry in South Africa today and the chemicals industry stands as the b i g g e s t u s e r, a c c o u n t i n g f o r o v e r h a l f o f t h e total consumption. As a result of significant growth within the chemical industry in recent

years, local salt sales have increased at an annual average rate of 1.56%.

‘SEE HOW IT RUNS’ Ce re bos , i n i t i a l l y foun de d i n t h e U K ov e r a c e n t ury a g o, w a s l a t e r e s t a bl i s h e d i n S out h Afri c a duri n g t h e 1 9 6 0 ’s a n d c on t i n ue s t o s t a n d c l e a r a s t h e l e a de r i n t h e S out h A fri c a n re t a i l s a l t m a rk e t . I n i t i a l l y a w h ol l y ow n e d s ubs i di a ry of R H M L t d U K, t h i s c om pa n y w a s l a t e r a c qui re d by Pre m i e r Foods i n M a rc h 2007.

Ce re bos h a s s e e n m a n y s t ruc t ura l c h a n g e s i n i t s S out h Afri c a n di v i s i on i n re c e n t ye a rs , a l l i n a bi d t o re i n s t a t e i t s c om m i t m e n t t o S out h A fri c a a n d t o i t s pe opl e . M ore re c e n t l y, t h e c om pa n y w a s a c qui re d by a c on s ort i um

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company profile of i n v e s t ors i n Fe brua ry 2 0 1 2 , h e l pi n g i t t o ma i n t a i n i t s s t a t us a s t h e qui n t e s s e n t i a l s a l t produc e r i n t h e c oun t ry.

A l on g s i de i t s s h a re h ol de r, t h e D e v e l opm e n t Ba n k of S out h A fri c a (D B S A), Ce re bos inve s t e d a n e s t i m a t e d R 1 2 0 m i l l i on t o h e l p fund t h e c on s t ruc t i on of a n e w pl a n t t o suc c e s s ful l y produc e pure v a c uum dri e d food g r a de s a l t t o t h e S out h Afri c a n c on s um e r.

L o c a t e d i n t h e I n dus t ri a l D e v e l opm e n t Z o n e , t h e n e w s i t e i s i de a l l y s i t ua t e d for bot h i m port s a n d e x port s a n d w i l l c on t i n ue to prov i de e m pl oym e n t opport un i t i e s t o t h e Sout h Afri c a n l oc a l s .

“Going forward, the strategy is to utilise Botswana production and packing facilities to produce local products for the Botswana market in Cerebos Ltd brands�

If w e l ook a t t h e root s of Ce re bos , t h e s e can be t ra c e d a l l t h e w a y ba c k t o t h e 1 9 t h ce n t ury w h e n a ph a rm a c i s t , G e org e D un c a n Bo w i e , i n v e n t e d dry-pouri n g s a l t by m i x i n g a c a re ful l y pre pa re d bl e n d of ph os ph a t e s a n d sal t . Pri or t o t h i s di s c ov e ry i n 1 8 9 1 , s a l t h a d to be purc h a s e d i n g re a t bl oc k s s o a pouri n g sal t w a s c on s i de re d a re v ol ut i on . Fol l ow i n g

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Cerebos t h i s inventio n, a s econd pharmacist, Ge org e We d d ell, u n d erto o k furthe r e xpe rime ntations a n d imp ro ved o n B owie ’s initial discov e ry, c r e a t ing a d ry, f ree-flowing salt – and so C e r eb o s w as b o rn .

T he co mp an y ’s name is de riv e d from t h e wo rd s ‘ C eres ’ – the Roman g odde ss of a g r i c u ltu re an d harv e sts - and ‘os’ - the L atin w o r d f o r b o n e. I ncide ntally, the phosphate s i n salt h elp to s treng the n the bone s, anothe r e s se ntial health b ene fit.

B y 1896, C ereb o s had sale sme n working t h r ou gh o u t the UK and in 1 9 0 4 the c om pan y b ecame C e re bos L td be fore mov ing t o G reatham. A revolution in the salt i n d u s try, C ereb o s ’ slog an, ‘Se e how it runs’ a c c omp anied th e im ag e of a young boy chasing a b i r d and p o u ring salt. Acquiring Middle wich S a l t C o . Ltd in 191 9 g av e the company a total w o r kf o rce o f 150 me n and 8 5 0 wome n and a s n ew p ro d u ctio n me thods we re introduce d, C e r eb o s co n tinu ed to e xpand into the h ou s eho ld b rand it is today – with ope rations i n Wes tern Eu ro p e, Australia, Ne w Z e aland a n d So u th Af rica.

“In Zambia, coarse salt is popular as they use it in the preparation of fish, which is a major business there.

They are also using it for animal feeds”

UTILISING DIFFERENT MARKETS Back to the present day and a deal was announced last month, stating that Chlor Alkali Holdings (a shareholder in Botswana Ash (Pty) Ltd) had acquired Cerebos. In a statement, John Drinkwater, Managing Director at Cerebos, said: “This does give Botash access to Cerebos brands and Cerebos access to Botash salt. Going forward, the strategy is to utilise Botswana production and packing facilities to produce local products for the Botswana market in Cerebos Ltd brands.

“This is underway and we intend to utilise local production and/or packing facilities for the Botswana market as well as utilising Botash salt in some Cerebos Ltd brands in Africa. We understand that it is important to support local economies in Africa wherever possible and this relationship allows us to do this,” explained Drinkwater.

It is hoped this deal will enable Chlor Alkali Holdings to expand further into Africa as Kefilwe Batsalelwand, Botash Public Relations and Communications Coordinator explained: “We are growing the group and the Cerebos you will see in local shops will be from salt produced in Botswana.

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company profile Pa r t o f ou r s trategy is t o g row our brand and ge t t i n g stro ng b ran d s like Ce re bos, is in line w i t h t h i s.”

Wi t h a recen t d irecti v e introduce d at the b e gi n n i ng o f J u n e 2015 v ia the Ministry of Tr a de a nd I nd u s try w hich imple me nte d a b a n on all s alt imp o rts smalle r than 1 0 0 kg , i t i s h op ed th is w ill en courag e more local p r od u c t io n and p ackaging of salt in South Africa. “ Im pl e men tatio n o f the se g uide line s would p r om ot e s alt p ackaging locally, stimulate d o m e st i c p ro d u ctio n and attract Fore ig n D i r e c t I nves tment, w h ich would in turn cre ate em pl oy m ent,” th e d irectiv e re ports.

B ot a s h has alread y reporte d sig nificant sale s i n Z a m bia, f o llo w in g the de v e lopme nt of a ne w d e p o t i n the regio n , it has he lpe d to e ncourag e a n i n c r e a s e in o rd ers with Z ambian buye rs s e l l i n g t o the DR C an d Rwanda. Salt sale s i n t o Z a mb ia have no w re ache d 2 ,0 0 0 tonne s o f c o a r s e s alt and 1, 000 tonne s of fine on a m on t h l y b as is . “ In Z amb ia, co ars e s alt is popular as the y u s e i t i n th e p rep aratio n of fish, which is a m a jor b u s ines s th ere. The y are also using it

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for a n i m a l fe e ds . B ot a s h h a s a l s o re c e i v e d orde rs for s oda a s h from Z a m bi a w h e re i t i s use d by s m a l l de t e rg e n t produc e rs ,” e x pl a i n e d Ba t s a l e l w a n d.

SALT FOR ALL Known for its abundance of mineral resources, it is estimated that South Africa h a s t h e w o r l d ’s 5 t h l a r g e s t m i n i n g s e c t o r i n t e r m s o f G D P. S a l t i s c l a s s i f i e d a s a m i n e r a l under South African law and is governed by the Mineral and Petroleum Resources Development Act, meaning that salt producers should in fact, comply with the same requirements set out for the mining houses – amongst which is social and labour plans, rehabilitation and black economic empowerment (BEE). Due to these and n u m e r o u s o t h e r r e g u l a t i o n s h o w e v e r, m a n y of the smaller salt producers do not follow these guidelines, paving the way for the larger producers, namely Cerebos.

One of the biggest game changers for the salt production industry came in 1954 with the compulsory addition of iodine to table salt. A nasty bout of endemic goitre

Cerebos and iodine deficiency spread across South Africa so the regulation to implement salt iodisation at a relatively low concentration of 10 to 20 parts per million was introduced.

Realising the benefits of this decision, 150 of t h e 1 9 3 Wo r l d H e a l t h O r g a n i s a t i o n m e m b e r nations have introduced salt iodisation programmes in a bid to banish iodine deficiency disorders which in extreme cases, c a n r e s u l t i n c h i l d m o r t a l i t y, c r e t i n i s m a n d reproductive failure.

Salt production has come a long way since the first days where demand would mean rationed shavings from a large block of table salt to the present day where Cerebos has become an international brand, all thanks to the perseverance and intuition of two pharmacists well over 100 years ago.

Although salt production in South Africa remains a demanding industry with seasonal challenges and costly production methods, we can be sure that salt, in its many forms, remains integral to our daily lives; supported rather fittingly by the late Madiba: “Let there be justice for all. Let there be peace for all. Let there be work, bread, water and salt for all.�

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