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20 September 2013
Local BBEE processor survives
Mr Hennie Kleynhans of Norjax, Ms Mmathulare Coleman, leader of the parliamentary oversight commission, and Mr Walter Moketla (chairman of Norjax).
Chinese choke
The dumping of low-priced Chinese tomato purée and tomato paste on the South African market has brought local processors like the established Norjax Canning (1948) from Politsi to its knees.
The company needs more than R30 million urgently to reposition itself into competitiveness by increasing production and creating jobs for thousands of people. Norjax was the focus point of a parliamentary oversight committee on Tuesday where the company’s position was discussed at length. The chairman, Mr Walter Moketla, explained that Agro Processors of Limpopo Ltd obtained a majority shareholding of 51% in Norjax in 2009. The shareholders are black
tomato producers in Limpopo and were supported by the provincial department of agriculture through a grant of R17 million. Processing tomato paste, purée, powder and canned tomatoes, the company showed excellent results, with a high profit margin. Limpopo Tomato Growers Association (LTGA) played a pivotal role. At the end of 2009, processed tomato imports from China hit the South African market at rock bottom prices and Norjax lost most of its major clients to the Chinese. The company approached the International Trade Administration Committee (ITAC) on the issue, who agreed that the imported products can be classified as “dumping” and imposed a 37% import levy on the Chinese product series. Hereafter the major clients of Norjax
returned, but the company was confronted with massive orders that could not be met. The only way forward would be to install an additional processing machine with the two existing ones at a cost of R12 million. This machine will be able to process paste and purée at a thicker density, or brix. At this stage the products are processed at between 26 and 28 brix, while the popular demand is at a thicker 36 to 38 brix. Norjax then approached the Industrial Development Corporation (IDC) for financial help, but received a tall list of compulsory demands to adhere to before a loan could be considered. Moketla told the commission that R31 million is needed to put the production plan on track. Apart from the R12m for the new machine, a further R18m will be required for
operational costs. “It takes at least three months before any payment on sales gets back to the company.” He said present production lingers at handling between 40 and 50 tons of tomatoes per day. With the new machine added, the production rate will climb from 50 tons to 500 tons per day. This may eventually create jobs for up to 36 000 people in die industry and will have a ripple effect on the employment figures of supporting firms. The parliamentary commission of seven members was led by Ms Mmatulare Coleman. The meeting was also attended by members of the provincial departments of agriculture and economic development and the national department of economic development. —Louis Roux louis@bulletin.us.com
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