Outlook Issue 1 / Food and Agriculture by TNT Multimedia Limited

FOOD AGRICULTURE

issUe 01

KFC to grow

Fast food giant well aware of the “African opportunity”

also this issue

NANDO’S

KEYSTONE MILLING

FRUITONE

ZAMBEEF

Editorial

Editor – Ian Armitage Writers – Colin Chinery Jane McCallion Robert Michaels

Business

Advertising Sales Manager – Andy Ellis Sales – Andy Williams Research manager – Jon Jaffrey Researchers – Eleanor Watson Sandra Parr Marcus Graham Marie Smith Sales administrators – Katherine Ellis Daniel George

Accounts

Financial controller – Suzanne Welsh

Production & Design

Magazine design – Optic Juice Production manager–Jon Cooke Images: Getty News: AAP, SAPA

digital & IT

Head of digital marketing & development – Syed Ahmad

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Welcome Staple but uncertain – what’s the future for maize? Welcome to Food & Agriculture Outlook, a digital and print magazine, which reaches an international readership. This month we look at maize, a staple with an uncertain future. While for millions of South Africa’s poorest, maize is the Number One nutritional must-have, input costs, market prices and other variables are raising some fundamental questions. On page 24, Henk Slingerland of sector leaders Keystone Milling tells us that the future of the primary staple food is looking good. Staying in South Africa, we also profile Nando’s, a ‘local gone global’ success story, which is about to celebrate its 25th anniversary. Thabang Ramogase, Marketing Manager, spells out the brand’s expansion plans on page 14. Food & Agriculture Outlook magazine is an international quality magazine with editorial, features and advertising relevant to the industry. Lots more inside. Enjoy the magazine!

Ian Armitage Editor

CoNteNts

Features

04 14

KFC

KEYSTONE MILLING

ABI

PA C M A R

FA I R C A P E D A I R I E S

FRUITONE

AFRIFRESH

N A M PA K D I V F O O D

ZAMBEZI RANCH AND

S PA R

ABAGOLD

ZAMBEEF

C O C A -C O L A

APPLETISER

100

N A N D O ’S

CROPPING

04 38 50 86

FREEDOM FOODS

94 3

KFC to grow

KFC

Keith Warren, General Manager of KFC’s Africa operations, and Managing Director Of Yum! Restaurants International, talks to Ian Armitage about KFC’s success in South Africa, expansion plans and how the company is using the brand to “improve the lives of others”. By Ian Armitage

frica has been the next big thing for a long time. Sceptics say it will continue to be just that for many years to come. However investment in Africa is growing. And with African markets booming, it looks like an increasingly attractive investment option. “Africa is being democratified – Ghana is a great example – and good governance and good governments have been installed. Africa is now beginning to boom,” says Keith Warren, general manager of KFC’s African operations. “Chicken on the bone is the protein of choice in Africa,” the native South African, who doubles up as Managing Director Of Yum! Restaurants International, adds. Yum! is well aware of the “African opportunity” and recently outlined plans to expand its KFC footprint in Africa from its current level of 655 restaurants to 2,100 a decade from now. “Africa has vast potential,” says Warren. He stressed that the improved political stability of various African governments, the region’s vast population and a growing middle class - as well as the fact that chicken is a dietary staple in Africa – has led Yum! to set its sights on the continent. “The vast majority of KFC’s restaurants in Africa are in South Africa, but we are being more aggressive in opening new restaurants across the continent,” says Warren. “We currently operate in 10 African countries: 5

KFC

South Africa, Nigeria, Lesotho, Namibia, Botswana, Swaziland, Mozambique, Egypt, Tunisia and Morocco.” The first KFC in South Africa opened in 1971 and Yum! is accelerating development into Nigeria as well as launching into Ghana, Zambia, Malawi, Kenya, Tanzania, Angola, Senegal, Cameroon and the Democratic Republic of Congo. “More and more businesses are now moving into emerging markets as growth in developed countries has slowed.” Warren points to examples like WalMart Stores Inc., which recently offered to buy 51 percent of South African retail giant Massmart Holdings Ltd., as evidence to support his claims. “Africa is attractive for Western brands. People are now focusing on the emerging world and a lot of companies, especially Chinese ones, have invested in Africa.” KFC has strong brand awareness in Africa. Of the roughly one billion people in Africa, Warren estimates it currently reaches 180 million. 6

“More and more businesses are now moving into emerging markets as growth in developed countries has slowed”

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KFC

The menus at African KFCs are similar to those in more developed markets, with the main difference being that there are more options for chicken pieces. Warren says: “Africans stay away from processed foods. They want chicken on the bone.” The great thing about the chain, he adds, is that it appeals to wealthier Africans as well as to people living on lower income levels. The company sells four chicken wings for $1.20 and two chicken pieces with a portion of fries for $2.80. “The combination of KFC being a global brand and it’s strength in Southern Africa

“Africans stay away from processed foods. They want chicken on the bone” 8

has created a brand that is highly aspirational across Africa. People will save up to buy the $2.80 meal, even if only once every three months,” Warren says. KFC sells chicken more cheaply in South Africa than most parts of the world because local labour costs are lower, he adds. “We appeal to wealthier Africans as well as to people living at a more modest income level,” Warren says. Yum! has 44 percent market share in South Africa and there are more than 600 KFCs in the country. It is South Africa’s biggest quick service restaurant brand. It is hugely successful in South Africa and many of KFC’s staff training and development programmes, its environmental focus and promotion of healthier diets, and its social responsibility initiatives, are the first of its kind in the country.

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KFC

“The KFC brand is very strong,” Warren stresses. “We are seeing significant growth. “Africa over the next 10 to 20 years will have massive potential.” KFC plans to invest about $500 million in its African expansion. But, the expansion will present plenty of challenges. In some countries, KFC imports its chicken from South Africa and Brazil. But there is still “a lot of protectionism in Africa,” Warren says. “In Nigeria and East Africa, imports of chicken are banned,” he says. In those places, KFC has been working with local suppliers to ensure the quality and safety of their chicken meets the company’s high specifications. All said, its growth plan is ambitious. “We are planning to open 20 KFC outlets in Nigeria in 2011,” says Warren. “We’ve got seven stores there now and we are going to build 20 next year.” Yum! forecasts that it will have 300 KFC restaurants in Nigeria by 2020. “We opened our first Nigerian KFC restaurant in December 2009. Why Nigeria? Well, 160 million people, eating chicken on the bone, as their primary protein, has to be a good thing. “Of course the poor infrastructure and bureaucracy as well as finding good partners are challenges.” KFC in Nigeria is currently a joint venture

between an existing Indian franchisee of the company (Devyani International Limited (DIL)) and a local Nigerian. “Nigeria is just one of many countries,” Warren says. KFC’s expansion can have positive effects for local industry players, he adds, citing the example of Rainbow Chicken in South Africa. “They’ve grown as we have grown in South Africa. They’ve built their business on KFC and we account for about 25 percent of their business.” Growth will also be achieved in South Africa, where KFC is planning to open some 200 new restaurants in the next five years. “South Africa enjoys one of the highest levels of penetration per population anywhere in the world,” Warren says. “If we look at the US, KFC has a penetration of 17 restaurants per million of the consuming population. Our penetration in South Africa is 36 restaurants per million of the consuming population. That is largely driven by brand strength, but as I said earlier, it also comes down to chicken on the bone being a valued source of protein and the ‘finger licking good’ taste of KFC.” KFC is committed to Africa. Its Add Hope campaign is proof of this. By adding just R2 to your meal, you can help KFC feed vulnerable

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people, typically children, and make a real difference. “In 2007, KFC decided to put hope on its menu and made a long-term commitment to fight hunger by focusing on the most vulnerable members of our communities,” says Warren. Add Hope is an independent, trusted organisation. KFC donates all the resources and marketing, so that every cent it raises goes towards feeding hungry children in South Africa. “Add Hope has driven greater awareness and much needed continued support for the global problem of starvation. We have a number of grassroots, national and high-profile initiatives, which give us an opportunity to engage with our local communities, often with the enthusiastic involvement of our staff. “Add Hope aims to do just that: we want to Add Hope to people and to communities. “We want to make a real difference 12

“We have a number of grassroots, national and high-profile initiatives, which give us an opportunity to engage with our local communities, often with the enthusiastic involvement of our staff”

in the lives of ordinary South Africans. This is a long-term commitment that we have undertaken as a brand. We are dedicated to raising funds at every possible opportunity and making a sustainable difference in the lives of the underprivileged.” The KFC’s philosophies are adapted from the Yum! Dynasty Model, Warren says. As well as Add Hope, KFC recently announced a new partnership with Cricket South Africa. The deal relates to mini-cricket, the entry point to the sport, and KFC has committed to a sponsorship programme of five years with the option of extending a further five years further down the line. “KFC recently took over the reins of the mini-cricket programme. KFC is committed to cricket from the ground up.”

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For more than two decades minicricket has been giving primary school children, from all walks of life, the opportunity to experience the game of cricket, learning basic skills from batting to bowling and fielding in an entertaining environment. “KFC Mini-Cricket is more than just about the game; it’s an opportunity to teach children valuable life lessons and social skills such as teamwork and discipline, while promoting a balanced and active lifestyle,” Warren says. “It is all about reinforcing the principle that we are part of the, or aspire to be part of the, fabric of daily life for every South African. That means being part of things like cricket and being part of things like encouraging a responsible and balanced lifestyle, particularly amongst the youth. Naturally when you have blokes like AB De Villiers that came through mini cricket in their day, it is also about developing the talent of the future South African cricket team.” Somewhere in fast-food heaven, Colonel Harland Sanders is smiling.

Established thirty years ago, Lufil Packaging manufactures a comprehensive range of environmentally-friendly paper packaging solutions in South Africa. The company supplies a diverse range of industries from industrial and government to healthcare and pharmaceutical. The largest sector, however, is fast food where Lufil is a market leader. All Lufil’s products can be supplied plain or printed, with customer-specific sizing and construction. Lufil also uses resilio paper , which provides an economical solution to the duplex bag to eliminate leaking. Resilio has a high grease and moisture resistance and was specifically developed to resist high-in-fat food products. The added advantage of resilio is that it offers grease resistance plus the benefits of paper, being that the porosity of the paper means the food will not sweat. In addition to its own range of products, Lufil is also the local agent for Rapid Action Packaging (RAP). A major player in the British packaging sector, RAP boasts a customer list that includes the most prominent UK-based retailers and fast food operators. RAP specialises in the design and manufacture of innovative, cost effective and environmentally responsible packaging solutions and aims to maintain a leading edge in the market as a producer of designs that are ergonomic, economic, and environmentally responsible. Its wide range of packaging systems include flexible food wraps, short-life and long-life carton sandwich wedges, fresh and long-life food trays and the Softpak flow wrapping lines. Made predominantly of paper they provide a greater surface area for branding which differentiates it from other traditional film flow packs with labels applied.

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‘Local gone global’

success story

With casual dining chain Nando’s about to celebrate its 25th anniversary, Thabang Ramogase, Marketing Manager, spells out the brand’s expansion plans. By Ian Armitage

hat the world’s appetite for spicy chicken is growing is evident from the fact that South African casual dining chain Nando’s continues to expand. Nando’s is one of South Africa’s most enduring and risque brands, and it sells some of the best chicken you can buy. Its core product, which is the signature peri-peri flame-grilled chicken, is made from the freshest A-grade butterfly cut chicken, marinated for 24-hours and with excess fat trimmed off. It also prides itself on only serving food with no added colour, flavour, additives or MSG. Its famed ingredient, the peri-peri, is rich in vitamin C, vitamin A, high in anti-oxidants and, best of all, the capsaicin in the chillies helps enhance metabolism and, consequently, burns fat quicker.

NaNdo’s

Nando’s has a lot going for it. “We are a successful brand,” Thabang Ramogase, Nando’s South Africa Marketing Manager, says. “Of course we celebrate our 25th anniversary in 2012. We are still in the planning phase of the celebrations. However, I can say that the celebrations will, in a word, be audacious. The plan is to drive them from out of South Africa, with an idea that not only celebrates our South African roots, but also amplifies our global presence in the hearts

“of course we celebrate our 25th anniversary in 2012. We are still in the planning phase of the celebrations”

and minds of our fans. The celebrations will kick off in earnest in the second half of the year, employing an integrated approach. Expect great creative output, song and dance and, of course, more of our great periperi chicken.” The key to Nando’s success in recent years has been threefold: convenience, health and value for money. Convenience is vital. There is a demand for food that is prepared in a suitable timeframe in locations that are close to 15

NaNdo’s

where people live and work because people have increasingly busy lives. Health is another big factor. The more people eat fast food, the more their need for healthier eating increases. Finally, value for money has been extremely important. Nando’s is, and always will be, a premium brand but that doesn’t mean it can’t offer value. You certainly get what you pay for when you pay them a visit. “The brand at all times strives to remain relevant and desirable in keeping with our role as the leading quick service fine dining experience,” says Ramogase. “To this end we have been revamping our current store universe of some 300 stores at a

“the brand at all times strives to remain relevant and desirable in keeping with our role as the leading quick service fine dining experience”

NaNdo’s

rate of around 40 stores per annum, with new livery. The themes aim to emphasise quality, detail in craftsmanship, our afro luso roots, all in relation to the way our product is made to be enjoyed by our fans. Just as no two fans are quite the same, the same is true of our new look stores. One will find variation in the local art on the walls, architectural design, fixtures and fittings and of course the nandocas that are happy to serve.” 18

Nando’s would like to keep up the momentum, however the market is tough. KFC is very dominant. But once people experience Nando’s, they keep coming back, Ramogase says. “Nando’s SA has delivered a stellar performance YTD, with one month left in our financial year,” he explains. “Specifically, we have delivered consistent double-digit growth, on the back of innovation, strong promotional presence and even more

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improved quality standards. The brand’s strength continues to lie in large metropoles, however some strong growth has started to come through from smaller geographies across the country, largely as a result of better opportunities being afforded to the previously disadvantaged. “The opportunity however still exists for the brand to drive trial in the fast food user category, as our research has shown that disproportionately more consumers that try Nando’s, are more likely to become users of the brand versus the competition. “Given the state of global finances and the impending meltdown of specific European countries, that unfortunately are major trading partners with SA, the prognosis for 2012 is neutral to negative,” he continues. 20

“Specifically, we have delivered consistent double-digit growth, on the back of innovation, strong promotional presence and even more improved quality standards”

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NaNdo’s

“Having said that, 2011 was no different, yet our performance was outstanding. We always plan for growth, as any good business should and are optimistic that we will continue on our current trajectory. “The competition has seen very modest to flat growth over the past year and the outlook for 2012 is probably no different, save perhaps for the relative newcomers who are getting organic growth from aggressively opening new outlets. We still see opportunities abound for us led by a combination of additional outlets as well as penetration into new market segments.” On a local level, Nando’s will be opening new stores in 2012, 22

“We always plan for growth, as any good business should and are optimistic that we will continue on our current trajectory”

while revamping existing ones with its “new look and feel”, Ramogase says. “Our international expansion will continue into key markets.” Another project in the offing is one that aims to develop a monolithic brand system, that will see Nando’s rationalise its CI globally. “Our feeling is that the brand needs to present a consistent face to consumers, wherever in the world they may have a craving for our delicious chicken,” Ramogase says. “What do I think is the key to Nando’s success? Authenticity. The brand has remained true to itself both intrinsically and extrinsically. While the tonality of form has shifted with the times, the core values of courage, integrity, pride and family have remained steadfast. Also, the brand while a force to be reckoned with, has never taken itself too seriously and this has given its people the latitude to do bold and exciting things.” 23

Staple but

uncertain what is the future for maize?

KeYstoNe milliNG

While for millions of South Africa’s poorest, maize is the Number One nutritional musthave, input costs, market prices and other variables are raising some fundamental questions. But Henk Slingerland of sector leaders Keystone Milling tells Food & Agriculture Outlook that the future of the primary staple food is looking good. By Colin Chinery

nd of the Road for Maize? - a start of year shock headline for those involved in South Africa’s biggest cereal crop and sub-Sahara’s main staple food. But with investment in better crop varieties in recent years doubling per hectare yields, maize production in South Africa has “saturated”, according to John Purchase, Chief Executive Officer of the Agricultural Business Chamber. And with maize accounting for 70 percent of the country’s grain production and 60 percent of its cropping area, agriculture industry representatives are debating how to deal with the future of this sector backbone. But from Henk Slingerland, Operations Manager of premium leader Keystone Milling, a more sanguine assessment. “The future of maize, a staple diet for the majority of the South African population, is huge, and at present the signs are that over the next few months raw maize might be in shortage in the country. 25

KeYstoNe milliNG

“There have been excellent crops but because of the prices increasing a lot of the farmers and trading houses have been exporting to take advantage of good prices overseas. In fact there might have been an oversight on the part of the Government in that we exported rather too much.” Some strategists believe that long-term, South African growers should look at growing maize for animal feed, or even biofuel manufacture. Slingerland however is more guarded. “Animal feed is already a part of the normal milling process – a by product called chop - accounting for around 30 percent, and we sell it as such. As for biofuel, at the moment this doesn’t really prevail in South Africa, we are lagging a bit behind the rest of the world.” Based in Rustenburg in the North West Province, at the foot of the Magaliesberg mountain range, Keystone Milling offers a variety of top end, high quality maize products fortified with vitamins and minerals for better health. These include super maize meal, special maize meal, samp, maize rice, braaipap, fine meal and hominy chop - used for animal feed. “Our mission is to consistently produce, sell and distribute via our own truck fleet, the highest quality products to our chosen markets by establishing a culture of excellence,” says Slingerland. The fore-runner company had been serving the local community for more than half a century when the two current directors, Hugo Ottermann and George du Toit joined Rustenburg Mill 12 years ago. They changed its strategic direction to a business26

“We are very much pro socio-economic development, playing a part in lifting the living standards of everyone that buys our products. Much of our operation is performed by unskilled labour, and there’s lot of on the job training. outside and in the wider community, we actively support a number of foundations, including HIV, Aids orphanages, and SPCA”

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orientated approach while maintaining the established product excellence, and Keystone Milling was born. The new company rapidly addressed the demands of a very competitive industry and soon developed into a dynamic business, and a staff of 250 now serves a growing client base in North West Province, Gauteng, KZN, Mpumalanga and Limpopo. With maize a staple diet in South Africa and beyond – and especially for poor communities - Slingerland stresses Keystone Milling’s wider interests and concerns. “We are very much pro socio-economic development, playing a part in lifting the living standards of everyone that buys our products. Much of our operation is performed by unskilled labour, and there’s lot of on the job training. Outside and in the wider community,

“What defines our products is their outstanding quality combined with value for money, a feature resulting from having the very best extraction equipment” we actively support a number of foundations, including HIV, Aids orphanages, and SPCA - the only animal welfare organisation in South Africa to be governed by an Act of Parliament.” Maize is the largest locallyproduced field crop and the most important source of carbohydrates in the Southern African Development Community (SADC) for both human and animal consumption. And South Africa is the main grower - chiefly in North West, the Free State and Mpumalanga - with an average production of about 8.9 mt a year over the past ten years. More than 8,000 commercial maize producers account for the major part of the South African crop, with the rest coming from thousands of small-scale producers. Not only are current

international maize and grain prices far stronger than those of most other commodities, but domestic prices have been boosted by the depreciation of the rand. Since the start of this year maize prices have increased to record highs, climbing to more than R2,700 a ton for white maize and topping R2,800 a ton for yellow maize. The SA Grain Information Service reports that maize deliveries to local silos for the current marketing season increased to 9.609 million tons in the week to January 6, compared with 9.601 million tons at the end of December last year. And initial intentions to plant estimates indicate a 10 percent increase for maize, with crop prices expected to remain high until harvesting of the 2011/12 summer crops begins. With a supply chain characterised by excellent relationships and agreements, Keystone is driving its strategy of new markets and new clients. “One of our biggest clients is CCW, a division of Wal-Mart controlled Massmart, and we have many independent and large wholesale customers. We want to grow this latter section of our

business still further, as well as exporting more to countries such as Botswana, Zimbabwe, and elsewhere in sub-Sahara Africa.” Keystone Milling’s biggest challenge is the pricing of raw maize and other input costs, notably fertilizers and fuel. “Many of our competitors cut their prices, and with ours being at least 10-15 percent higher it’s a big challenge in a country where a lot of the people are on the breadline. But we are countering this by campaigning, promoting and media advertising,” says Slingerland. “Keystone is a premium brand, and while our prices are significantly higher than the run of competitors, what defines our products is their outstanding quality combined with value for money, a feature resulting from having the very best extraction equipment. In a very competitive market, this is part of our secret.”

Inside

ABI Food & Agriculture Outlook profiles Amalgamated Beverage Industries (ABI), Coca-Cola’s largest bottler in South Africa, and the soft drinks division of SAB Ltd. By Ian Armitage

oca-Cola is the most recognised brand on the planet. 125 years in the making, it is a billion-dollar product, sold in 206 countries. It has been in Africa since the late 1920s and in South Africa since the 1930s, when the first bottling plant and distribution centre were opened in Johannesburg. Today, Coca-Cola has a presence in nearly all of Africa’s countries; the Coca-Cola system is one of the continent’s largest employers, with approximately 68,000 employees and 160 plants. Its impressive position is made possible by the hard work and commitment of its dedicated employees, as well as the strength of its local partnerships: bottlers, suppliers and retailers.

Its main vision is to “benefit and refresh” the people of Africa. But what many people don’t realise is that the Coca-Cola business is actually a local business. No matter where in the world it operates, its brands are produced, packed and distributed by bottlers that are deeply rooted in the communities in which it operates. South Africa is no different and a key contributor to CocaCola’s success here is its network of four bottlers: Amalgamated Beverage Industries (ABI), CocaCola Fortune (part of Coca-Cola SABCO), Peninsula Beverages and Coca-Cola Shanduka Beverages SA (Pty). Each bottler is responsible for a specific geographic territory and they’re significant creators of opportunity in their communities, driving economic development through employment, procurement and other commercial activity. But these are more than bottlers: they are Coca-Cola’s partners in the true sense, sharing the same vision and mission. Significantly, the bottlers do something The Coca-Cola Company doesn’t do in most instances, which is produce the beverages and deliver them to customers around the world. They also execute Coca-Cola’s in-trade marketing strategy. For The Coca-Cola Company, Africa is still something of an untold story, and could be the big story, of the next decade. John Ustas, the Managing Director of ABI, Coca-Cola’s largest bottler in South Africa, and the soft drinks division of SAB Ltd, believes that there is opportunity for the “embedded” annual growth rate for Coca-Cola in South Africa

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abi

to be pushed to as much as six percent. It is currently two percent. That opportunity lies in the townships, he said. ABI accounts for just under 60 percent of the Coca-Cola products sold in South Africa, with the rest shared by the other three bottlers. “We are servicing just under 70,000 customers; we believe there’s potential for 200,000,” Ustas explained. He said that with customer service at the core of its strategy, ABI is making a number of improvements to its operations across the value chain that will enable the company to service its increased number of customers, and to do so faster.

“to this day it is one of the world’s three best-selling cars ever. Its unique silhouette is recognised all over the globe” Key among these, he said, is:  The introduction of Market Logistics Partners (MLPs); satellite ABI depots that are owned and run by respected members of communities and which service smaller customers with customised vehicles at a higher frequency.  Improvements to ABI’s fleet with the introduction of Hackney trucks (with lock-up compartments) and rear-loading tail-lift trucks that increase productivity as they are quick to oﬄoad.  Layer-pickers that enable one operator to pick 12,000 cases of ABI products in a shift.  Further productivity initiatives are also intended to increase sustainability by reducing ABI’s carbon emissions:  Adapting the production lines to use less resin to produce ABI’s PET bottles means that the company has reduced its carbon emissions and customers have not had to take a price increase, due to the increase in resin costs this year.  The conversion from crates to shrink-wrap for the 500ml and 1L PET pack sizes has meant a 33 percent increase in pallet density for the 500ml PET pack and a 37 percent increase for the 1L pack. ABI products not only take up less space in storerooms, but the company now uses less fuel to deliver the same number of products.  ABI is countering their increased investment in cold drinks fridges by installing Energy Management Devices in all coolers, ensuring that customers use (and pay) 30 percent less for energy.

Aside from these sustainability initiatives, ABI actively invests in community partnerships. In August, ABI committed a total of R12.5 million over three years as part of, what it called “its commitment to developing the communities in which the company operates”. ABI pledged its support to four projects: The Youth Zone, Ikamva, ECD and Growth Link. “ABI has a strong link to the communities it touches and the regions in which it operates,” a statement said. “We believe in ‘performance excellence’, and we cannot just be driven by business performance alone,” explained Tshidi Ramogase, Corporate Affairs Director, ABI in that recent release.

“We know that we cannot be sustainable as a business if we don’t contribute to the upliftment of the communities in which we operate.” The objectives of ABI’s corporate social investments are to bring attention to programmes that focus on youth development; sustainability initiatives aimed at reducing the impact on the environment; early childhood development, and entrepreneurial development training. “Our three-year commitment to all these projects, is indicative of our deep commitment to the sustainable development of the communities that we operate in,” concluded Ramogase. To learn more visit www.abi.co.za. 33

Tapping into Africaâ&#x20AC;&#x2122;s growing demand for

Pacmar is seeking capable distributors in Africa for its own brands of fruit juice. The South African-based firm is also a hugely successful contract packager, providing solutions to clients across the continent, as Food & Agriculture Outlook discovers. By Ian Armitage

paCmar

ackaging is important for a number of reasons. Perhaps, most significantly, it represents a company’s brand; it is the customer’s first experience with a product and plays a big part in the purchasing decision. Nobody understands that better than Pacmar. The firm, located on the outskirts of Wellington, is currently packaging house brands in local and international markets, as well as its own private label brands in South Africa and neighbouring countries. “We specialise in liquids, packaging things like wine, fruit juice and other beverages, in both aseptic (sterile) and preserved forms and we offer Elopak, Tetra Pak, bag in a box, PET and bulk packaging,” says Pacmar Sales and Marketing Manager Barry Pretorius. “We currently do contract packaging for some of the biggest retail brands in South Africa. We can also provide complete solutions for companies in the rest of Africa, from product development to the sourcing of raw materials, to the final packaging. Everything can be done to the client’s own specifications and specific requirements.” Pacmar also has its own brands of fruit juice; part of the business that Pretorius says is “eyeing expansion”. “Our own brands include the Wilde Pressed fruit juice range, the Wilde 100% fruit juice range and Zing fruit nectars. We also have our health juice in Crystal Falls,” he explains. “Anybody wanting to learn more about them and also understand the differences between Pressed, 100% fruit juice, Nectars and Fruit drinks should visit our website, www.pacmar. co.za,” he adds. Situated conveniently close to Cape Town harbour, Pacmar brands get sent across the globe. Pretorius says the company currently has a strong focus on expanding its brands on the African continent. “Africa is growing steadily and we believe there is a lot of future growth and business opportunities in Africa.”

Pacmar’s brands are currently being distributed to Africa, Asia, Australia and Canada. “At present, we are specialise in three facets of supply: contract packaging, which constitutes the bulk of our local business, own brands and exports,” Pretorius says. “We therefore ensure that all parts of the equation remain soundly intact and managed as effectively and efficiently as possible. It goes without saying that we are on a serious mission to increase our footprint and standing within the local market as well as overseas markets. Product development is therefore critical to the sustainability of any “player” in any market. Directly associated and linked to this is the vital ingredient of availability and visibility. Ultimately, optimising the point-of-purchase is where the “game” is won or lost. When we have done that effectively, we plan to cross our borders into Africa. It’ll probably take a while before we truly embed ourselves in Africa, certainly within two to three years. “Our main aim would be to pursue market development, which is in essence entering new markets with our existing range of products.” Pacmar prides itself on offering the “best available” quality. For packaging, that means the materials used on the lines are not only checked by the suppliers’ quality control—who are governed by the printing association of South Africa—but are also checked by the company’s own incoming inspection and quality control department before any packaging can begin. “We are proud to announce that we are in the process of implementing the first stages of ISO 22000. It is the world’s largest developer and publisher of International Standards. We are also HACCP approved as well as Organic Certified,” Pretorius says. “We do not and will never compromise on quality, irrespective of where it fits in the supply chain,” he adds. “We also pride ourselves in always conducting business in the most ethical way possible.” As for Pacmar’s own juice products, the company offers only premium beverages. “Our Pressed juices are simply the best, 35

albeit that they demand a slight premium. Our 100% juices are second to none and our Nectars are certainly on par, if not better than most. “Our attention to detail and quality is almost certainly what sets us apart. This is underscored by our philosophy statement that reads, ‘not the biggest, but the best,’ and which is supported by our four pillar approach of quality + service + relationship + cost.” In a market that is indispensible to businesses and customers alike, the packaging industry finds itself in the fortunate position of expecting continued success well into the future. With its quality-first approach and years of expertise and passion, Pacmar is looking to expand into new areas. “We are performing well, considering the state of the global markets, oil prices and our currency exchange rate,” Pretorius says. “It is a difficult environment because of a decrease in the amount of disposable income shoppers have. We are dealing with people that have no option but to down trade. It is indicative of the climate in the country at the moment. The global economic impact has finally made its way around to our part of the world. The fuel price is a prime example. We always feel it three to four months down the line. Electricity has gone up 50 percent in two years, which has been another major factor. It has a huge knock on effect, and somewhere down the line,

“right now we are optimistic about the future; we just have to stay positive. there is no alternative, regardless of what is happening locally and globally. We will stick to our strategy and plans and if need be, amend them accordingly as time marches on”

paCmar

you have to look at your finances as they get tighter and think, ‘what do I really need to buy with this money?’” Pacmar, though, has set itself apart amongst the competition as a company that will rise to the top and bring its customers and consumers along for the ride – so the future for the company is bright. “We have a really good product and we offer a fantastic service on the contract packaging side,” Pretorius says. “Then, of course, we have been methodical in our expansion. Obviously you can invest millions of rand immediately or you can do it in a strategic, systematic way. We want to grow, but we aren’t going crazy in terms of flooding the market and spending buckets and buckets of money. There are some serious market players at the moment and they have a fair share of the market and to expect us to just knock them off their pedestal is unrealistic. That won’t happen that easily; so we have a more cautious, but assertive approach as opposed to being

aggressive. Being slow and deliberate is key in our efforts and approach and what will ultimately make us prevail as a major player in the juice arena.” Pacmar has been in operation since 1997 and its growth story is impressive. Pretorius says the secret to its success is the firm’s simplicity and its people. “Quality does not end in production, but flows over into everything we strive for and do. “We are a medium-sized business, going through the transition from a ‘family’ business to a corporate entity, which in its own right provides its fair share of challenges: We are very prudent in our decision-making and certainly do not do things for the sake of it, but more so always remain focused on the “bigger picture”. “Right now we are optimistic about the future; we just have to stay positive. There is no alternative, regardless of what is happening locally and globally. We will stick to our strategy and plans and if need be, amend them accordingly as time marches on. I have no doubt that we are and will continue to build a really great and sustainable business.” To learn more visit www.pacmar.co.za.

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Hammy@sunlog.co.za (Contact for quotes) CELL: 0849519021 Karen@sunlog.co.za CELL: 0847004398 Carol@sunlog.co.za Vijay@sunlog.co.za CELL: 084 555 4243 37

The

créme de la créme Cape Town based dairy producer Fair Cape Dairies produces Fair Cape Eco-Fresh™ Milk in an environmentally friendly manner with animal wellbeing and the environment, being paramount. By Ian Armitage

hile there are as many types of entrepreneur as there are businesses, most entrepreneurs share some common traits. They tend to be visionaries. Melt Loubser, CEO of Fair Cape Dairies, started his working life as a civil engineer but in 1995 spotted an opportunity to turn the family farm into a modern business. At the time South Africa’s agriculture was being deregulated, and the rural economy quickly shifted its emphasis and became more consumer-focused, he says. The time was right to “add value to the raw milk we were producing” and selling, and the subsequent success of the company proved him correct.

Fair Cape dairies

Taking up the story, the Fair Cape Dairies website says: “In the past, milk was supplied to the larger dairy manufacturers who monopolised the industry with low prices to the producer and high prices to the consumer. “As a result of this, the Loubser family was faced with a decision to either close their Dairy business, or alternatively to identify ways to add value to Dairy – which is what we did. “One thing led to another but out in the market place we were unable to find a partner with whom the Fair Cape business could fulfil their dream – namely to innovate the market with products that flow from one of our strategic values – passion for quality.” At the time the general market had yet to grasp the idea that value for money does

not necessarily mean cheap products of inferior quality. “A relationship with one of South Africa’s premier retail chains, Woolworths, soon afterwards developed and has subsequently grown into a strategic partnership. A dedicated production facility called The Dairy Connection was built in 1997 to exclusively supply Woolworths with their dairy range on a national basis. This partnership was critical to our business, as Fair Cape had finally identified a customer that understands the buying needs of the public, as well as the ability to recognise and exceed the expectations of their customers.” Today, with his brothers – Eduard Junior, Villiers, Louis and Johannes – father Eduard Senior and Operations Director Johan Boshoff, Melt continues to drive the various business units that make up the Fair Cape Dairies group forward. Significantly, though, the family farm to the north of Cape Town remains the company’s bedrock, providing something like 50 percent of the milk used in the dairy processing operations. Melt has vertically integrated the dairy value chain and grown a world-class downstream business. “Fair Cape Dairies have, until now, produced Fair Cape Free Range™ Milk in an environmentally friendly manner with animal wellbeing, being paramount,” says information the company sent a Food & Agriculture Outlook researcher. “The Friesland cows are fed only natural products with no animal by-products or added hormones, ensuring that the milk is 100 percent natural, the best possible milk for consumers. To ensure that the milk they produce is of the very best quality, the cows are kept in large enclosures, allowing free movement, thereby subscribing to the Fair Cape Free Range™ ethos. The Fair Cape range of dairy products consists of milk, yoghurts, desserts and a variety of fruit juices.” Louis Loubser, Marketing Director of Fair Cape Dairies, adds: “This is the crux of what we believe at Fair Cape. Our entire brand is based on the principal of sustainability in food production and the respectful treatment of the sources of our food.” 39

And tHE ACColAdES roll In…

BrEAKInG nEW Ground

South Africa’s dairy industry shone at the recent International Dairy Federation’s 2011 Innovation Awards in Parma, Italy, producing both finalists and winners. Fair Cape was named a finalist in the Best New Dairy Drink category and also contested the Best New Functional Dairy Product title. It was recognised for its innovative Rooiboost Shots, a drinking yogurt flavoured with rooibos tea, and for its rooibos yogurt. The International Dairy Innovation Awards 2011, winners and finalists were announced on October 18 in Italy. This year’s awards attracted over 125 entries from 25 countries in 14 categories, including products, packaging, marketing as well as environmental sustainability. The judging panel was made up of 10 industry experts and was chaired by American Bill Bruce, editorial director of the FoodBev Media group. Both Rooiboost Drinking yoghurt shots and the Rooibos yoghurt are highly regarded for their health benefits, with Rooiboost combining the recommended intake of six cups of Rooibos Tea per day to aid and help fight cancer and these, as a result are the only yogurt products in the world to be endorsed by the Cancer Association of South Africa. “We are thrilled at this phenomenal achievement. We have always believed in these products, however, to have them recognised as some of the best new dairy products in the world this year eclipsed our greatest expectations,” says Loubser. “We have always believed in our products,” he adds.

Fair Cape Dairies, which is the current Guinness World Record holder for the World’s biggest cup of yogurt, exclusively revealed to Food & Agriculture Outlook that it is about to introduce its “all new, environmentally friendly”, Eco-Fresh milk range. “Being no stranger to displaying dairy excellence, Fair Cape is currently the first and only dairy in South Africa to print and reveal their ‘green status’ on their labels,” the company said. “The new Fair Cape Eco-Fresh milk is produced in an ecologically friendly manner, resulting in a prominently lower carbon footprint. “The transition from the ‘Free Range’ Trademark to Eco-Fresh hinges mainly on the fact that Free Range focused solely on Cow Comfort whereas with Eco-Fresh Fair Cape has evolved the concept; the focus has now shifted to the whole environment, taking into consideration four pillars upon which Fair Cape Eco-Fresh milk is based,” it added. “These four pillars include putting specific focus on pollution, eco-friendly farming practices, animal welfare as well as the Carbon footprint. This, along with the publishing of the carbon footprint on the labels is a clear indication of dedication and transparency of business practices displayed by Fair Cape Dairies. Critically, Fair Cape will be the first dairy in Africa to print its carbon footprint on its bottle.” Aside from adhering to an environmentally friendly production process, Fair Cape is well aware that the quality of the milk is dependent on the comfort of the cows. This is why Fair Cape Dairies took the initiative and launched the first ever Cow Comfort Index in South Africa in March 2011. The Index allows for the overall wellbeing of the cows to be carefully monitored, ensuring their health and comfort at all times. “It is a significant move for us,” says Loubser. Being the leaders of Eco-friendly dairy farming, the concept of helping and supporting the environment is fully embraced by Fair Cape Dairies. Since being carbon assessed, it has taken an integral approach to carbon management in its pursuit of a ‘greener’ and more environmentally approach to milk production.

Fair Cape Dairies

“The new Fair Cape Eco-Fresh milk range is a prime example of sustainable dairy and will be available nationwide in your supermarkets from January 2012,” Loubser says.

said, Fair Cape has performed remarkably well given the economic climate. We have seen sustained growth and our footprint has grown to now be a serious player, not only in the Western Cape market, but in the Gauteng Market too. “The launch of the new Fair Cape Eco-Fresh brand also signals the next evolution in the Fair Cape milk range. “What do you think is the secret to our success? The secret to success is simply the passion of the Directors, management and staff and the communal buy-in to the Fair Cape Eco-Fresh concept. This is not something one can simply slap on a bottle, this needs to be lived throughout the company. “Everything we do needs to reflect the Fair Cape Eco-Fresh concept; for example, you can’t sell Eco-Fresh milk, yet litter on your way home. All the staff are really excited to be associated with such a successful company whose point of difference revolves around a better, cleaner environment and a better way of living for the cows. When staff have a cause like this to rally around, passion becomes par for the course.”

CONTINUED SUCCESS

To learn more visit www.faircape.com or visit them on facebook @ www.facebook.com/faircape

What does he think is the secret to Fair Cape’s continuing success? The answer, Loubser says, is simple: Innovation. “Innovation is a core pillar of this company,” he explains. “We dedicate large resources to innovation. This innovation covers all aspects of the company from logistics, to operations, to sales and marketing. However, the core of this is the New Product Development team whose role it is to continually innovate to introduce new and exciting offerings to the market. “Innovation has won Fair Cape the reputation of the most exciting player in the market who consistently launches new and exciting products different from the ‘metoo’ range currently on shelf and has given the retailers the confidence to back us and increase our footprint nationally. Two of the best examples of this are our Rooibos yogurt and our Rooiboost drinking yogurt shot, which I’ve mentioned. “Innovation is important as Dairy is a difficult industry,” he continues. “You are dealing with a commodity with high input costs and low margins - there are also limited channels for distribution in South Africa which make it doubly tricky. That

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All

kinds of fruit FruitOne GM Louis Mentis talks exclusively to Food & Agriculture Outlook. By Ian Armitage

ruitOne is a pioneer in the South African citrus market. From its Tzaneen base, it oversees and manages the production of Lemons, Star Ruby Grapefruit, Naval and Valencia Oranges and more than 1,500 hectares, on four estates in Limpopo. Fair Trade accreditation with the European Union means that its products have access to international markets. “FruitOne is a family-owned business and it was started in the 1970s with the purchase of a 160 hectare production unit in Letsitele,” says FruitOne GM Louis Mentis. “It has grown over the years to include a number of other production units totalling 1500 hectares

FrUitoNe

under irrigation, making us one of the larger single citrus growers in South Africa. “Coupled with this, we have slowly integrated into the chain and set up separate business activities that allow us to get value out of the chain, and more importantly reduce our cost. “We have moved from being just a producer to being a fully integrated agricultural company.” FruitOne’s business activities, says Mentis,

“Fruitone is a family-owned business and it was started in the 1970s with the purchase of a 160 hectare production unit in letsitele” 43

include companies that are responsible for production (it has five individual production units operating as separate companies, including two units that are land restitution projects), procurement, packaging (it has four packaging facilities, two of which have cold storage facilities), logistics (FruitOne moves over 2000 truck loads per year), cold storage, marketing and export, and financial market trading. “Do I enjoy life in the sector? Yes!” he proudly admits. “It’s not all plain sailing and there are always frustrations, challenges, and setbacks that present themselves. However,

the positives certainly out weight the negatives; I think it’s a sector of the economy that is vital in the South African context. Besides food security, it’s a major contributor of foreign exchange earnings, which helps offset some of South Africa’s trade deficit. Agriculture also requires a lot of labour, and thus this sector has a massive potential to employ the unemployed in the economy, which is such a critical factor for South Africa. Its good to know that we are contributing to the economy in a meaningful way.” Mr Mentis joined FruitOne in January 2003 after the Group’s owner, John Boyes, asked him to start off an export arm. It was an interesting business opportunity, he says, with a number of exciting prospects. “I decided it was an opportunity that was too good to refuse and I took on the challenge. Its certainly has been a very interesting and rewarding journey seeing FruitOne grow in to its present form.” Today, Mentis is responsible for the general management function within FruitOne. He says that as the company has grown, it has brought in new expertise to fill positions that required specific skills. “We have quite a dynamic team at FruitOne and we try to get our staff to take ownership of their jobs and positions,” Mentis says. “We give them the tools and environment to make their own decisions, so from a management point of view I don’t spend a lot of time managing people, but rather the broader operational processes of the business. “FruitOne (Pty) Limited was first established as the

FrUitoNe

“Agriculture also requires a lot of labour, and thus this sector has a massive potential to employ the unemployed in the economy. Its good to know that we are contributing to the economy in a meaningful way”

by setting up business that will provide us with the services and products we currently use. An example of this would be like the commercial citrus nursery we have just started. This will supply us with the trees we require to do all our expansions, plus offer the open market these citrus trees. The same model will be applied to all our inputs such as packaging, chemicals, fertilizers, etc. In the immediate future, we are looking to develop further our logistics division to include its own fleet of trucks, plus have our own clearing and forwarding division. Other future goals include the possibility of sourcing citrus from southern and northern hemisphere countries, supplying the FruitOne brand 365 days a year, and expanding our production to include countries outside of South Africa.” Mentis is a passionate man, and extremely optimistic about the future. We wish him and FruitOne every success. To learn more visit www.fruitone.com.

marketing and distribution arm of our broader agricultural activities in South Africa and over the years the company has evolved into a agricultural organisation that has an number of business activities,” he adds. “The Group is referred to as FruitOne by the industry, but in reality FruitOne is actually the export company for the Organisation, with a number of companies making up the rest of our Group. Our future goals are to double the size of our organisation within the next five years. We have plans to increase our production base to include the planting of additional hectares on our current production units, plus investing and developing additional production units in Limpopo and in other provinces in South Africa, such as the Eastern and Western Cape.” Mentis says the aim is to ensure the business “spreads risks”, both from a geographical and cultivar perspective. “We anticipate that we will be exporting between five and six million boxes of citrus within five years,” he explains. “We certainly have plans to integrate further into the chain 45

You reap what you sow

aFriFresh

The Afrifresh Group is a leading global exporter of fresh fruit, food products and wine from South Africa. Roy Fine, new development director, talks to Food & Agriculture Outlook. By Ian Armitage

he Afrifresh Group is a leading global exporter of fresh fruit, food products and wine from South Africa. The group, which was founded in South Africa in 1992 as an import business to supply retailers with “out of season” fruit, has acquired extensive farmland throughout the country giving it direct influence over quality and consistent control of supply. This dynamic group continues to expand and the current CEO, Chris Conradie, is one of the original founders. “Following the deregulation of the fruit export industry in 1997, we saw an opportunity to start exporting South African fruit all over the world; the government had deregulated the industry and dismantled many fruit trading boards, leaving global customers with direct access to export quality fruit,” explains new development director, Roy Fine, taking up the story. He says that, prior to deregulation, there were many control boards including the likes of the Deciduous Fruit Board, through which every producer had to work and each board would determine which distributors could be supplied.

“It was a single-channel market, which restricted activity and made it difficult to trade in. Deregulation meant that it was possible to deal with individual companies directly. We took advantage of that opportunity to start exporting and in 1997 I started Sunpride (Cape) Pty Ltd with my family, which was one of the first new export fruit companies; The Fine Family has been in the produce industry in South Africa since 1908, and my late uncle Leo Fine, was Chairman of Unifruco and later Capespan for many years.” The family has origins in farming that date back to the 1940s and strong roots in the Elgin Valley, Fine says. “In 1999, in one of the first mergers in the fruit export sector, I merged Sunpride with another new and emerging exporter, Afrifresh. With the benefits of economies of scale and added expertise, the enlarged Afrifresh Group quickly became one of the top five South African fruit exporters.” Initially the group exported all fruit lines, but found it was better to specialise, and later focussed on grapes and citrus, as they were both large volume lines and were counterseasonal, allowing the management and team to operate productively, 12 months of the year. “We also supply local supermarket chains such as Woolworths with part of their programmes and plan to grow this local business, but at least 70 percent of our fruit is currently exported,” says Fine. “The Afrifresh Group is not only involved with farming and export fruit, but has also established a successful wine business called African Pride Wines (Pty) Ltd and a food business called Berfin (Pty) Ltd; we also have a raisin factory and business called Fruits du Sud. These businesses strengthen our relationships with the major international supermarkets, as they see us as not just as fruit suppliers, but rather as trading partners.” The Afrifresh Group’s philosophy has always been to control “the chain”, and as a result, over the years, it has integrated backwards into primary production, as well as forwards into packhouses, logistics and distribution. 47

According to Fine, the Group currently has 22 farms and numerous pack-houses, with a total farming area of over 30,000 hectares, and support the farms with a top technical and management team. “The Group marketing department is responsible for marketing our fruit all over the world and there is virtually no country we don’t export to. While our volumes continue to grow, so have our markets expanded,” Fine says. “The EU represents approx 40 percent of total volume, Asia comes next, but we also directly supply India, Japan, Malaysia, Indonesia, China and Russia, with the latter being probably our fourth largest market. “As we specialise in grapes and citrus specifically, which are counter-seasonal, we export grapes from midNovember to May, and citrus from April to October.” Fine’s challenge is to look at new opportunities, while Chris Conradie looks after the daily operations of the business. “What does my role essentially boil down to? Well, I will look at new projects, new farming opportunities, new supermarket clients, and maybe entering new markets; I also look at business development in the sector as well as growth funding and investors.” Earlier this year, Standard Chartered Private Equity bought 30 percent of the Afrifresh Group for $20 million. According to Fine, the new funding will support the company’s plans to expand its global footprint as a producer and exporter of citrus and table grapes. “We are working on increasing our local production 48

“While our volumes continue to grow, so have our markets expanded”

and export potential, which includes increasing exports to Asia. We are also looking at the opportunities in Sub-Saharan Africa and how we can use our IP to get involved and add value. Over the last few years Afrifresh has grown mainly through farm acquisitions, which has helped us create an integrated, profitable and sustainable business.” Further expansion is on the cards. “Chris, myself and our senior team, believe that the bigger picture is that the world population is growing at an alarming rate (just passed the seven billion mark) and against this, that arable land is diminishing – so, we are essentially heading for a “train smash” in so far as more and more people are seeing higher food inflation and less and less available product. We see this problem also as an opportunity to grow the farming side both in SA and eventually outside SA as well, and with our committed, passionate and qualified team, I believe we can take up the challenges. “Currently we don’t have any farms out of SA but we are looking at farming opportunities

aFriFresh

in Mozambique, Angola and Zambia. Down the line, when things improve in Zimbabwe, we would certainly look there too.” Afrifresh aims to expand to meet future demand. “We see the agricultural sector as dynamic and exciting and want to expand and we are continually looking for ways to increase our farming operations and hectarage. The market and demand is certainly growing. South Africa is a very good source of top quality produce with a good location, with world-class infrastructure and logistics. We are certainly very bullish about the future.” Fine says Afrifresh is always looking for more “partnerships” and “investors” with which the company can work and use their expertise and huge knowledge to take the business into the future. “I believe South Africa and Southern Africa can play a very important role in addressing the world’s food security problems. The world’s population continues to grow, and resources are diminishing. We have to do something now to ensure food

is available in the future. We are looking to increase the yield of crops per hectare, and maximise our land use, but we also want to grow by developing more good arable land. I can see a lot of investment coming into Southern Africa and am having discussions with a number of potential investors from the UK, China, Europe and the Middle East to achieve that. There are great opportunities for agriculture.” From humble beginnings in 1997, employing a few people, the Afrifresh Group has created many new jobs and opportunities, trained and assisted numerous people and has today a highly efficient team in excess of 80 people, and a farm work-force of more than 3000, with turnover in excess of R1 billion. Most importantly, everyone in the Group is passionate about the business and embraces the challenges ahead. “The prospects are good,” concludes Fine. “We see a bright future for agriculture. We have the legacy, people, passion, expertise and vision to build on our past successes.”

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solution Long established as the top name in South African metal can production for the nonbeverage market, Nampak DivFood is facing emerging competition and export challenges with confidence, says divisional managing director Ephraim Msane. By Colin Chinery

ach year Nampak DivFood, South Africaâ&#x20AC;&#x2122;s leading food and diversified can supplier and All in One solution provider to the industry, sells an impressive total of almost one and a half billion food and diversified cans into the domestic market. Worldwide it supplies into 35 countries. This is the Nampak â&#x20AC;&#x2DC;Can Doâ&#x20AC;&#x2122; spirit; signed, sealed and delivered.

NampaK divFood

“over the years we have developed skills ranging from packaging design to production and customer support” “Over the years we have developed skills ranging from packaging design to production and customer support. And customers put great value on the depth of our experience. We have the largest packaging R&D facility in South Africa if not the southern hemisphere, and we keep a very close eye on what is happening in the global packaging sector,” says divisional managing director Ephraim Msane. “Put all this together and it clearly gives us the edge.” Manufacturing and marketing a diverse range of high quality two-piece and three-piece cans, Nampak DivFood’s portfolio includes a comprehensive choice of plain and lacquered ends, full-aperture tinplate easy-opening ends,

and peel-offs. All manufactured to exacting requirements from largely local tinplate. And as one of the few metal can manufacturers producing tinplate and aluminium aerosols worldwide, Nampak DivFood tailor-makes aerosols in varied sizes and shoulder profiles. With designs printed in high quality detail, brand image – a Silent Salesman – is enhanced, leaving an impression of product quality in the eyes and minds of consumers. Nampak DivFood also shapes its aluminium 51

Nampak DivFood

aerosol cans - an advantage in a market where packaging shape is perceived to be uniform across different brands. In collaboration with Nampak Research & Development, Nampak DivFood cans are backed by cutting-edge materials, food technology and microbiology laboratories. These world-class facilities play an integral role in providing microbiology and spoilage investigation, thermal process validation, new materials and shelf life evaluation, container physical testing, hygiene audits and other canned food musthaves. A complete and highly professional supply chain management system enables its customers to reach their markets in record time. Nampak DivFood has over 60 years experience in manufacturing plain and decorated metal containers, 52

â&#x20AC;&#x153;Needless to say we continue to organise ourselves appropriately to meet this new competitive challenge and remain the leading supplier that we have been for yearsâ&#x20AC;?

Adding value across the globe

Examples of the products we proudly supply to Nampak Divfood

www.alutrade.co.za making it the acknowledged South African leader in aerosols, metal containers and decorative tinware. Two modern design studios, equipped with state-of-the-art computerised design systems, complement DivFood’s design capability and provide customers with limitless decoration options for added shelf-shout. Its promotional tinware includes beautifully finished tins celebrated for their designs and excellent print quality, offering a functional, visually appealing, durable and relatively inexpensive option for promotions and limited-edition product ranges. As a creative and innovative manufacturer with access to the best international technology, Nampak DivFood is able to fulfil almost any customised requirement across wide market segments. While competition in the past has been limited, new companies have recently entered the can-making sector and are attempting to establish a presence. “This is probably the biggest challenge we have,” says Msane. ”Aside of course from

Tel: 011 791 3339

Printing Ink Specialists

A Proud supplier of Inks and coatings to Nampak DivFood EAGLE INK SYSTEMS KZ NATAL (PTY) LTD A SUBSIDIARY OF EAGLE INK HOLDINGS (PTY) LTD

11 The Avenue East, PROSPECTON 4110 P.O. Box 74079, ROCHDALE PARK 4034 Tel: (031) 912-1928/39/44/49 Fax: (031) 912-2034 E-mail: mail@dbn.eagleink.com

PPG Packaging Coatings is a leading producer of coatings, inks and compounds for the Packaging industry. We serve the beverage, food, cosmetic, personal care and pharmaceutical markets as well as the paint and chemical industries. Through our technical expertise, our service excellence and with over 125 years of experience, PPG Packaging Coatings constantly adapts and develops versatile, innovative and high performance coatings with outstanding appearance.

www.ppg.com

Nampak DivFood

the ongoing South African challenge of exchange rate fluctuations. Needless to say we continue to organise ourselves appropriately to meet this new competitive challenge and remain the leading supplier that we have been for years.” Nampak DivFood is itself a direct exporter, selling canmaking components and cans. “We have over 40 national markets throughout the world. South America and the Far East are major markets, and selling into Africa is a key strategic goal.” Msane notes too the big push from client base to cut costs. “There are also environmental pressures. South Africa may be regarded in some places as Third World but in terms of the multinationals we deal with, South Africa is set the same standards as elsewhere in the world. So compliance with the same benchmarks on say recycle ability or carbon footprint are demanded and expected, and we find all of these kinds of issues are coming to the fore in South Africa now. We have substantial investments in recycling initiatives, and

“We want to provide the best quality and the best service for our customers, hence the investment in new equipment”

PPG Industries is a leader in its markets, a streamlined and efficient manufacturer and operates on the leading edge of new technologies and solutions. With more than 125 years of existence, PPG is today a global coatings and specialty products manufacturer with over two-thirds of our $13.4 billion sales in 2010 generated by our coatings activity. Strengthening the commitment to this sector, PPG went through multiple acquisitions in recent years, the most significant in EMEA being the Ameron acquisition in 2006, Sigma Kalon in 2008. They provided access to new market sectors in EMEA in Architectural, Marine and Protective coatings and increased our presence in Automotive, Refinish, Industrial, Aerospace and Packaging coatings businesses. It is our vision to continue being the world’s leading coatings and specialty products and services company, serving customers in construction, consumer products, industrial and transportation markets and aftermarkets. PPG has manufacturing facilities and equity affiliates in more than 60 countries around the globe. Not only that, PPG is one of the world’s leading producers of packaging coatings. We supply innovative, high-performance products for virtually every end-use. The metal packaging industry is becoming increasingly innovative. New shapes, novelty printing and distinctive decoration help brand-owners’ products stand out on the shelves. To make this happen, PPG Packaging Coatings is constantly adapting and developing coatings to be versatile, easy to apply, reliable and to achieve outstanding appearance. PPG Packaging Coatings operates in Europe, Africa, Asia, Australasia and on the American continent. Our

www.ppg.com/packagingcoatings

corporate R&D centre is located in Alison Park, Pennsylvania where chemists dedicated to the Packaging business focus on long-term projects. Our development laboratories are located around the world to respond to local market needs. PPG Packaging Coatings’ products and services offer a complete range of solutions for the Beer & Beverage cans and easy-open-ends, food cans, aerosols cans, tubes, general line cans and drums, caps and closures and peel-ends markets. Our product portfolio comprises technologies for both aluminium and steel substrates, encompassing both internal & external coatings with products that combine superior performance at value-added costs. Also included are coatings designed for plastic tubes made for thermal and UV curing, combined with all the relevant application processes. Since PPG Coatings South Africa has a unique manufacturing facility in Alrode, Johannesburg, we are well positioned for local value-add to PPG’s global cutting edge technologies. Our local access to PPG’s global research network and quality approach coupled with our local infrastructure and support makes PPG an essential business partner. PPG Coatings South Africa have successfully supported DivFood and Nampak R&D with the development and implementation of the interior universal lacquer coatings system of fish, fruit and general line cans currently in use. This is just one way in which PPG supports their customers with quality systems, inventory management and the overall integrity of their cans.

NampaK divFood

After

â&#x20AC;&#x153;If a customer comes to us he receives not merely a view on which can to use or how it should be made, but advice all the way through to how his product is going to perform once inside the canâ&#x20AC;?

Before

309 Derdepoort road Silverton Pretoria South Africa

Tel: +27 12 804 9124/5 Email: gem.tmp@mweb.co.za

Metal pressing - Plastic Injection - Surface Treatment - Toolmaking Services We offer our customers engineering solutions on metal and plastic components on medium to high volume production. We are specialists in the field of high-speed progression tooling, metal pressings, Injection moulding production and surface treatment on high volume tin components. We have been part of the Nampak Divfood operation for over 10 years, adding value as a supplier to their needs on high volume metal and plastic components. We strive to offer our customers: • RELIABILITY • QUALITY • COMPETITIVE PRICING Gem Manufacturers are committed to Broad-Based Black Economic Empowerment and are certified ISO9001:2008 under the SABS certification body.

because we intend to be in this business for a very long, long time we want to make sure that in the way we do business everything is as sustainable as possible. “We want to provide the best quality and the best service for our customers, hence the investment in new equipment, new printing equipment for example that will give us faster turn-around time and better quality. We’ve also put in new end making machinery, again to give customers a better service and lower cost.” Over the years Nampak DivFood has shown that it will invest behind increased customer requirements. A good example of this is the addition of two lines to its aluminium aerosol can manufacturing capacity in the past three years.

“A main point is that we don’t just supply a can, which is what our competitors generally do,” says Msane. ”Basically they buy machines, make products and then sell them. They don’t, for example, spend much time with their customers to support their machines in terms of running their lines effectively. They don’t spend as much time explaining how their products behave in the can. “Nampak DivFood on the other hand, gives full support in all these areas. So if a customer comes to us he receives not merely a view on which can to use or how it should be made, but advice all the way through to how his product is going to perform once inside the can. “We aim to provide our customers with total packaging solutions that strike the optimal balance between high container performance, safety, and low price. And at Nampak DivFood we have the experience, expertise, innovative edge and strength of resource that no other local manufacturer can match.” 59

Zambezi

ranching and Cropping

ZambeZi raNCh

raham Rae is one of the most fascinating people I’ve ever had the pleasure of interviewing. He knows farming. It is

Privately owned Zambezi Ranching and Cropping is Zambia’s largest mixed farming operation. Food & Agriculture Outlook talks to Managing Director Graham Rae. By Ian Armitage

what he does. Rae, a hugely successful commercial farmer, used to do it in Zimbabwe, a country he was born, grew up in and loved. Today he struggles to think of going back to the place where his grandparents were born in 1910. Rae, who now lives in neighbouring Zambia, is one of several hundred white farmers who fled Zimbabwe because of President Robert Mugabe’s campaign to redistribute white-owned farms to landless blacks. He said militants from Mugabe’s ZANU-PF party tried to kill him before he left in 2001. “[It] was all down to survival,” Rae says of his decision to leave. The Zimbabwean government launched a programme of land seizures in 2000, stripping white farmers of their property, a move that was almost wholly responsible for the near total collapse of a once thriving commercial agriculture sector, says Rae. He used to own a 1,100 hectare farm in Shamva, Zimbabwe, which boasted the largest private dam in Zimbabwe that also serviced 56 other black and white farmers in the area. With his wife Bernadine and three children, he left after numerous threats and a tip-off that he could be killed. Now, they live happily on Penyaonse Farm, perched on a hilltop, 45 km northeast of Zambia’s capital Lusaka. “Listen, it has been very much Zambia’s gain this whole thing,” Rae says. “Zambia has prospered and yes I would say that Zimbabwean farmers like me have played a role, but so too have farmers from elsewhere, like South Africa. “I think what has happened in terms of Zambia’s growth can be attributed to the strong leadership that has been shown in this country,” he adds. Rae says at his farm they have increased crop production considerably and created many new jobs; farmers like him have also 61

Zambezi ranch

introduced new farming methods and improved soils to enhance yields, while supporting families through outreach programmes and opening a medical clinic. Zambezi Ranching and Cropping, a huge farming network, has medical clinic for workers and communities nearby, he says. “When we first moved to Zambia, only 100 hectares of Zambezi Ranching & Cropping Ltd was cultivated but we’ve changed that, putting in hectares of white maize, seed maize, wheat, soya beans and tobacco.We are now cropping 4,000 hectares with room for expansion. “Tobacco production has increased massively in Zambia since I arrived; there are 2,500 workers compared to 150, and the number of beef cows has grown to almost 11,000. “Since our arrival, tobacco output has increased significantly and more jobs have been created. There were approximately 1,000 to 1,200 breeding cows and around 17,000 hectares of land when we got here; we’ve now expanded the land holding

“Zambia has prospered and yes I would say that Zimbabwean farmers like me have played a role, but so too have farmers from elsewhere, like South Africa”

up to 33,000 hectares. We put up silos; we have expanded our cattle herd to around 11,000 head; we are doing chickens – we do 210,000 chickens every six weeks - and we’ve put in 1,500 hectares of irrigation. We have revamped all the buildings, staff housing, built new houses, and built new storage facilities, so we’ve done a hell of a lot. “These days we are cropping huge amounts per annum and selling a lot of livestock.” It is a fantastic growth story. During the 2010/11 season, Zambezi Ranching and Cropping supplied 2,225 head of cattle of Zambeef, Zambia’s biggest agricultural firm with a revenue of K770.5 billion. He thanks Carl Irwin, Francis Grogan and Adam Fleming, for their part. “It has been a great journey and obviously we are hungry for more.” Rae takes pride in being part of Zambia’s agriculture sector and owns a stake and management rights in Zambezi Ranching and Cropping. So what next for him, the firm and the

ZRC Farms? Well, Rae, for one, plans to cut tobacco output, because of high production costs. Tobacco output in Zambia reached 40 million kg in 2010. Farmers are also growing maize and other cash crops. “The tobacco industry certainly faces challenges and has peaks and troughs,” Rae says. “Tobacco is increasingly costly to produce. Price increases often cause consumers to stop smoking all together. If volumes fall in countries where tobacco sales are the highest, this could spell doom for the industry. For that reason we have to start thinking about diversifying and at the moment we are looking at potatoes, onions and canned tomatoes.” Growing potatoes could be an answer, he stresses. “I’ve got a colleague who runs a potato distribution business and he is forecasting a 20 percent growth per annum on potatoes,” Rae says. “They [the distribution company] are utilising about 1,600 to 2,000 tons of potatoes a month; of that Zambia is producing about 800 tons. So there is a huge gap for expansion. 63

“On onions, most of the onions are imported out of the Eastern Cape and there is a market there, if we can learn to grow the right varieties and store them properly. There is also opportunity for supplying both crops into the DRC.” A new an exciting development is that of canning tomatoes. “That is an initiative with the global conglomerate Glencore. They have come here and are looking at putting some canning plants in. We are in trials at the moment,” Rae says.

“If you look at potatoes, tomatoes and tobacco, they all come from the same family, so you can’t grow them together because of the common diseases. Cropping is an exciting part of our business, with lots of opportunities”

ZambeZi raNCh

“If you look at potatoes, tomatoes and tobacco, they all come from the same family, so you can’t grow them together because of the common diseases,” he cautions. Regardless, these are optimistic times. “Cropping is an exciting part of our business, with lots of opportunities,” Rae continues. “We’ve probably another 800 hectares of irrigation development that we can do, while we are always looking to improve our methods and invest in technology. We look too at maintaining our eco-systems and environment. That is vital. Anything we see as environmentally non-friendly we have to look at moving away from it; we are looking at pesticides, to give you an example, and fertilisers.” Rae also wants improvements on the ranching side of the business and an increase to carrying capacity. “When you look at Brazil, it has the world’s largest commercial livestock herd. Zambia has a way to go!”

A concern he has is that the farming population is getting older and older. “At the last Zambian National Farming Union annual conference, the president raised this issue with the president of the country and said that farmers were getting older and older and something had to happen to make it more attractive for young Zambians to go into farming. Most of the younger generation drift off into the towns and cities for the bright lights,” Rae says. Zambia remains one of the most politically stable countries in the Southern African Development Community (SADC) and Africa as a whole. There has been democracy since 1991 and the country is likely to boom for many years to come.

PO Box 350231 Lusaka - Zambia Cell: 0977 791387/8/9 0978772551 Telefax: 0211 273111/118 Email: sales@irritechzm.co.zm

VALLEY CENTRE PIVOTS DRIP IRRIGATION CONVENTIONAL OVERHEAD IRRIGATION Performance. Period.

PUMPS & PIPES 65

SPAr ZAMBIA CHArtS 40% Market Share Surge

SPAR is a unique retail concept, a hugely successful global organisation of independent retailers and wholesalers working together. Mike Yeatman, CEO of SPAR Zambia, tells Food & Agriculture Outlook of its current burst of expansion and the major assault this “proudly Zambian” supermarket group is poised to make on the retailing sector. By Colin Chinery

hen Mike Yeatman travels across the Zambian high plateau 200 miles north of Victoria Falls wearing a ‘SPAR’ shirt, people call out, ‘Hey Mr SPAR, when are you coming to the Copperbelt?’ And Yeatman, CEO of SPAR Zambia knows why. “They want retailing competition; they want an alternative.” And the 58-year- old Zimbabwean is delivering the goods. His is company on course for growing the current seven stores to 30 by 2015. SPAR has been in Zambia eight years, its flagship, SPAR Arcades in Lusaka, the capital city with a population of 1.7 million: a boom city with new buildings, chain stores and shopping malls rising everywhere. But until recently the grocery retailing market here was relatively unsophisticated. “The sector started effectively 17 years ago when Shoprite arrived and, until we opened, Shoprite dominated. Now Pick n Pay has just

spar

arrived, but Zambia is not like South Africa or Zimbabwe and neighbouring countries where there are a lot of competing supermarkets. “Overall there are a lot of small shops, but there’s capacity for the supermarket chains to grow.” SPAR is a unique global retail concept, responding to the convenience needs of various modern day lifestyles, and its outlets identified through their innovative, creative, quality and customer-oriented character. Near the entrance of a typical store the focus is on fresh produce, appealing to customers in a hurry and looking to buy filled sandwiches, salads, readymade meals and fresh juices. Further inside are top-up items in the dry grocery and non-food sections as well as a bakery, butchery and deli. Essential to meeting these convenience needs, SPAR has long opening hours, a youthful modern appearance and a focus on fresh quality and quick friendly service – ‘The Best Fresh Store Which is Closest to the Customer’. And now SPAR Zambia – already one of the largest producers of fresh bread in the market - plans to achieve a third of the formal retail market share over the next five years. Strategies are in place, rolling out, and creating a

stir. A year ago, with seven stores and the distribution bakery, SPAR Zambia began an operational re-alignment with partnership stores turning into franchises in line with the SPAR worldwide system. By the close of 2010 there were three franchise and four corporate stores, and Yeatman sees franchising as the powerhouse of SPAR Zambia’s future growth. “Since then and following two and a half years of re-structuring, we have opened a store in Chipata, capital of the Eastern Province on the border with Malawi. In November we have another two corporate stores opening in Lusaka and we have just signed up a franchisee in our third largest city Ndola, which will re-launch as SPAR in October. The same month our out of town store at Livingstone, capital of the Southern Province and tourist centre for the Victoria Falls will be closed and re-located into the centre of Livingstone. So we’ve got a hectic few months ahead of us.” SPAR International is a phenomenon. Founded in the Netherlands in 1932 by Adriaan van Well in response to the emergence of grocery chains in Europe, SPAR is now the world’s largest international food retail chain, with 13,600 stores in 33 countries. There are 803 in South Africa – where it arrived in 1962 26 in Botswana and 69 in Zimbabwe. The biggest SPAR nation is Britain with 2,560 stores, each one a franchise. But despite this global reach, SPAR is not a multinational company but an organisation of independent retailers and wholesalers working together. True to the original philosophy of each country operating autonomously, it forms a unique partnership that allows it to operate locally and offer customers a personal service supported by the benefits of global business. The ability of SPAR to develop stores best suited to local cultures and individual locations is seen as a major competitive strength. SPAR continues to modernise and successfully develop leading edge concepts, supports local communities in terms of employment and of purchasing local products, and believes in developing strong supplier linkages. 67

spar

“At SPAR, we seek to create a retail experience which will attract and retain customers through our ‘Passion for Food’, and by constantly monitoring best international retailing practice. Our objective is to become the retail destination of choice through a retailing environment characterised by freshness, range, uniqueness, authenticity and visual excitement,” says Yeatman. His chief focus is quality and service: the aim to widen the range of products offered to customers by working with other SPAR countries, such as South Africa, Holland and the UK. Why shop at SPAR? “We offer a bigger product range and better selection than our competitors. If you look at our mission statement, what we pride ourselves on is being the Best in Fresh, and maintaining affordable pricing across our extensive range of products. “And we offer great service to our customers. It’s part of the SPAR International Strategy, part of our strategy, and how we believe we will grow,” Yeatman says. SPAR International’s Dutch HQ has expectations of strong growth in Zambia and Yeatman will not disappoint. Skills are an issue here, and Yeatman has embarked on in-house training, developing a succession plan, and encouraging personal development and commitment to core values and strategies. “At SPAR Zambia we receive technical assistance from SPAR South Africa and support through SPAR International. We are growing all the time, and the career opportunities and prospects for advancement with us are excellent. 68

“What we pride ourselves on is being the Best in Fresh, and maintaining affordable pricing across our extensive range of products”

“And on the broader front the national economy is growing and we believe we can contribute greatly to that growth. And an important factor here is that we are a Zambian company. With respect to our competitors, Shoprite and Pick n Pay have mainly South African shareholders, whereas we are registered in Zambia and have Zambian shareholders.” National identity and distinctiveness are critical both for SPAR and to Yeatman. “It’s very important and something we must market with more emphasis. We are saying, support SPAR, it’s a local company supporting local people, and it’s an important part of our strategy. In Zambia there are a lot of vegetable farmers, and we like

to buy their products along with locally produced fresh meat and chicken. There’s not a lot of fresh fruit grown here and we buy in from South Africa. Subject to them being competitive, we also support local manufacturers and local distributors of international brands. And like SPAR International, SPAR Zambia is very much involved in community projects and social responsibility. It’s another strong aspect of our Zambian identity. “Meanwhile we continue to modernise and successfully develop leading edge concepts. We have passed through our period of consolidation, and opening four stores in two months is evidence of this. I see unbelievable growth for SPAR Zambia.”

Cargo Management & Logistics CML Zambia is fully licensed by the ZRA and offers a full range of clearing / forwarding / bonding / warehousing and distribution facilities, with a total of 13 offices located throughout Zambia. CoNtaCt Ndola (Northern Region) Tel. Intl +260 21 2650486 2650885 / 2650886 / 96 6999221 Fax. Intl +260 21 2650880 Email. ethan@cmlzambia.co.zm

Lusaka (Southern Region) Tel. Intl +260 21 1272352 1272339 / 96 6999219 Fax. Intl +260 21 1272301 Email. john@cmlzambia.co.zm

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A big nation has a big thirst. It takes a lager that has been born and brewed in Zambia to satisfy that thirst. A lager that reflects the character of a progressive, friendly and proud nation. A nation that moves ever forward but never forgets its roots.

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Fruit & Veg City (Z) Ltd is a wholly Zambian Company specializing in the wholesale supply of fresh perishables countrywide and dealing in all sectors of the market. We pride ourselves in getting quality produce from the farmer to the end user. Fruit & Veg City (z) Ltd is a loyal supporter of local Zambian farmers, both commercial and small scale, that supply fresh produce on a daily basis. The Company is run by a highly dedicated and dynamic team who are also proficient in all aspects of food handling and hygiene standards required of the Industry. Fruit & Veg City (Z) Ltd have established a strong and loyal relationship with the Spar chain of supermarkets in Zambia supplying their stores countrywide.

Not For Sale To Persons Under The Age Of 18.

Sea Fruit of the

abaGold

Christo du Plessis, managing director of Abagold, tells Food & Agriculture Outlook that South African abalone, known to South Africans as perlemoen, is one of the most desirable seafood dishes in the world. By Ian Armitage

bagold Limited’s story is remarkable. The South African firm has grown from humble beginnings as an experimental hatchery some 20 years ago, to become one of the largest land-based marine aquaculture operations in the world, incorporating several large abalone farms and a world-class processing plant. And the company keeps growing. “Perlemoen is a seafood delicacy unique to the South African coastline,” says Abagold’s Christo du Plessis, a perlemoen lover. “Demand continues to rise.” It is popular the world over, but especially so in the Far East where it has almost mythical status among chinese people, he says. However, aggressive poaching saw abalone added to the endangered species list, and, although it has since been removed, it is by no means safe. It is steadily being wiped out, experts say. It is a serious problem but one du Plessis believes farms such as Abagold’s can help solve through providing ‘an alternative’ to wild caught abalone.

turnInG tHE tIdE Headquartered in the New Harbour, Hermanus, Abagold specialises in farming Abalone shellfish and is helping to preserve the culinary treat, while meeting everincreasing demand. “It was clear that the only possible solution to future availability of abalone was aquaculture,” du Plessis says. “Abagold was born.” Established in the early 1990s with minimal seed capital, Abagold has now grown into a position where it is the leading producer of South African abalone, exporting some 220 tons yearly, representing a monetary value of more than R55 million. “We just recently received a capital injection of R53 million to grow production over the coming years,” du Plessis says. “The money was invested via BEE shareholders, which brings the empowerment shareholding component in Abagold to 25 percent.” The capital injection will be used to grow Abagold’s production to an estimated 475 tons annually over a period of five years. 71

“The financial injection from Inspired Evolution’s R700 million equity fund, Evolution One, will put us in a commanding position as a leading player in the hatching, rearing, processing and exporting of local abalone,” du Plessis says. “It will enable us to expand abalone production capacity for export, meeting increased demand from the Far East, and will help us set the global standard for cultivated abalone production – that’s the objective,” he continues. Abagold currently comprises three farms: Sea View, Bergsig and Amaza. In 2010 the company purchased a further seven hectares of land adjacent to Bergsig, with a view to establishing a fourth farm – something that is now a reality. Construction work on this project, called Sulamanzi, has already started and the first tanks will be operational by the fourth quarter, du Plessis says. Once completed, this new farm will raise Abagold’s total production capacity to 475 tonnes per annum and the staff complement, which currently stands at 270, will increase.

“Farming abalone is a labour intensive effort. We will have to considerably increase the number of people we currently employ; it’ll have to be grown to around 470.” Du Plessis says most of the production will be exported and that “to increase” Abagold’s green footprint the new farm will have dedicated seaweed tanks. “We will strip nutrients in the abalone eﬄuent water by growing seaweeds, which will then be fed back to the abalone. In this way water is returned to the sea cleaner than when it left.” Plans are also in place to install a turbine in the eﬄuent line to recover electricity. Abagold is also well placed to supply the local municipality with desalinated drinking water du Plessis says. “Why is this important to us? Well we are committed to responsible growth through innovation, science and mariculture best practice,” he says, before talking more about the production process: “In the larval rearing area, fertilised eggs are hatched and nursed for the first week

abaGold

before they are transferred to the hatchery, where settled animals spend the first few months feeding on diatoms. Animals are weaned onto macro-algae in the nursery and grown to spat size. “The hatchery produces excess spat every month – this way only the best animals are picked out to ensure the superior final product. Grow-out tanks are situated on our three farms and prime selected animals from the hatchery are placed on Sea View where expert staff provide them with the best possible care.” Once the abalone are of a suitable age and size, they are moved out to Amaza where the intermediate sized animals are housed. Finally, they are taken to Bergsig to complete their growth phase. Combined, the current farms house 2,000 land-based tanks that require more than 7,000 tons of pumped seawater every hour. “It is a big operation and carries big costs,” du Plessis says. “The Abagold story is a remarkable

one, having grown from humble beginning into one of the largest land-based marine aquaculture operations in the world and one of the principal employers in the Overstrand,” he adds. “It is our aim to achieve sustainability. Responsible growth is vital. We see many growth opportunities, but then we aren’t the only farm that is expanding and we are seeing more and more players come into the industry.” Abalone is considered a delicacy in all parts of the East, where it is commonly known as Bao Yu, and almost always forms part of a Chinese banquet. The availability of commercially farmed abalone has allowed more common consumption of this once rare delicacy, and it is locally available as a canned product. “South Africa produces something like 1,000 tons of farmed abalone a year and I believe globally the market is something like 50,000 tons,” du Plessis concludes. To learn more visit www.abagold.co.za.

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Abrasives, Adhesives, Blades, Cable Ties, Castors, Circlips, Drills, Grease Nipples, Fasteners, Gloves, Hand Tools, Holesaws, Hoses, Hose Clamps, Food Grade Lubrication and Maintenance Sprays, Metals, Nylon, Perspex, Valves, Fittings and Flanges and much more. 7 TRAMBER PLACE BLAKE STREET OBSERVATORY TEL 021 447 2697 - FAX 021 447 3973 email: hopfast@netactive.co.za

Zambeef: Agri-business

powerhou Food & Agriculture Outlook goes to Zambia and learns more about Zambeef, the country’s agri-business powerhouse. By Ian Armitage

ambeef is one of the largest agribusinesses in Zambia and is a national, as well as African, success story. The company began life as a small butcher shop in the capital, Lusaka in 1991.It has since grown to become one of the biggest food production businesses on this continent. And it produces just about anything. Place “Zam” in front of just about any food product, and there is a pretty good chance Zambeef Products PLC is making it. Unsurprisingly, its tagline is ‘Feeding the Nation’. “We are one of the largest agri-businesses in Zambia,” says Justo Kopulande, Zambeef Product’s head of public relations.

ZambeeF

ouse Zambeef is a real giant, involved in the production, processing, distribution and retailing of beef, chicken, pork, milk, dairy products, eggs, edible oils, stock feed, flour and bread. It also has large row cropping (maize, soya beans and wheat) operations, with around 5,000 Ha of row crops under irrigation and 1,500 Ha of rain-fed/dryland crops available for planting each year, according to the company’s website. Zambeef is in the process of rolling out West Africa expansion in Nigeria and Ghana too, in conjunction with Shoprite, as well as a palm project within Zambia.

“Those are certainly the big developments,” Kopulande says. Zambeef’s financials are impressive. It had annual revenues of ZMK770.5 billion ($162 million) for the financial year ended 30 September 2010. “We have one of the leading distribution and retail footprints in Zambia,” Kopulande says. Zambeef currently operates 87 stores under the Zambeef banner and 20 in-house butcheries in Shoprite supermarket outlets in Zambia, while it has seven of its own fast food outlets under the brand Zamchick Inn. It operates two in-house butcheries in Shoprite outlets and four stores under the Zambeef banner in Nigeria and a further two in-house butcheries in Shoprite outlets in Ghana. 75

ZambeeF

nIGErIAn EXPAnSIon In Febuary Zambeef announced it had invested $10million at a farm at Ikenna, 80km from Nigeria’s capital Lagos. It includes a meat processing facility and soybean farming.“We have already developed a supply chain in Nigeria over the past two years,” Kopulande says. “Nigeria is important to us going forward.” Zambeef’s road to Nigeria began in 2009, after Shoprite had expanded into the country from the supermarket chain’s base in South Africa. Zambeef operates Shoprite stores in Zambia, and the chain wanted to use Zambeef as a supplier and to staff Shoprite butchery counters in Nigeria. Zambeef has invested around $2 million in Nigeria and plans to invest a further $8 million over the next eight years to hire staff, open more Master Meats shops and use the Ikenne farm as a hub to supply neighbouring countries. Zambeef predicts revenue will more than double in Nigeria by year-end. “What Zambeef has been able to do in Nigeria in a very short time frame is nothing short of a miracle,” Gerhard Fritz, Africa operations manager for Shoprite, was quoted as saying recently.

“Zambeef is a real giant, involved in the production, processing, distribution and retailing of beef, chicken, pork, milk, dairy products, eggs, edible oils, stock feed, flour and bread”

Privately owned Zambezi Ranching and Cropping, Zambiaâ&#x20AC;&#x2122;s largest mixed farming operation, has a cattle herd of 10,400. During the 2010/11 season we supplied 2,225 head of cattle and around 900,000 broilers to Zambeef. With annual revenue in the region of K770.5 billion, Zambeef is the largest agri-business in Zambia. Zambezi Ranching and Cropping currently employs 2,500 workers and 14 managers who are all responsible for running their own farms. We support local agriculture by supplying a self contained clinic for workers as well as local neighbouring farms, supporting local schools and sporting events. We do not just supply animals, but also crop tobacco, wheat, maize, seed maize, soya beans, potatoes and onions. Zambezi Ranching and Cropping has a SILO storage, a handling and drying facility, with a capacity of 9,000 tonnes. We currently irrigate 1,200 hectares in winter and supplement 1,500 hectares in summer. Zambezi Ranching and Cropping is situated in Chisamba, Zambia - 28kms north of Lusaka International Airport. For more information on how we can supply for your business, please contact: Telephone/Fax: + 260 211 840349 Email: berns@iwayafrica.com / gc@iwayafrica.com Private Bag 583X, Ridgeway, Lusaka, Zambia Penyaonse Farm, Chisamba, Zambia

ZambeeF

PAlM oIl In January Zambeef announced plans to boost its palm oil plantation in Mpika. It is a significant move for the firm, according to Kopulande. Zambeef said it will invest $2.5 million in the palm plantation in Mpika, which when in operation would be the lead exporter of crushed palm oil in the region. In a statement, Zambeef CEO Francis Grogan said that the 20,000 Ha plantation – which was launched in 2008 – would be boosted further to make it achieve its potential and produce the long-term benefits. “Zambeef remains committed to develop its palm plantation,’’ he said. Zambia is among the largest 80

“the palm oil project will not benefit Zambeef in terms of exports, but would also play a key role in our business. Palm oil will play a key part in our future”

importers of palm oil from Asia, with Zambeef importing large quantities from Malaysia, which it uses in its limping unit at Zamanita, he added. To achieve a healthy crop yield, Zambeef has engaged palm experts from Palm Oil Technology of South Africa, one of the leading palm consultants in the world, says Kopulande. Zambeef’s subsidiary, Zampalm Limited, has already planted the first 3,000 Ha of palms. “The palm oil project will not benefit Zambeef in terms of exports, but would also play a key role in our business,” Kopulande says. “Palm oil will play a key part in our future,” he adds.

ZambeeF

AIM lIStInG Zambeef recently became the first Zambian company to list on London’s alternative investment market (AIM), raising $55 million in total in conjunction with a domestic rights issue. It listed just weeks ago and the listing is seen as an indication that local companies have the potential to penetrate the international market – Kopulande that it is a sign that Zambia has an ability to penetrate more international markets.“We are becoming a more global business, yes,” he says. The $55 million raised via a listing on AIM will be used to bankroll the acquisition of ETC Bio-energy Limited, which the firm bought at $45 million in a transaction completed in June. According Kopulande, the acquisition of ETC Bio-energy Limited will lead to Zambeef controlling almost 100,000 Ha of farmland in Zambia.

“these assets will provide the Group with the agricultural throughput for its processing operations which the board believes should generate additional value and higher margin whilst reducing impact of the volatility of commodity price fluctuations”

We have Fresh Kariba Bream from the mighty Zambezi! We are proud to supply Kariba Bream, a delicious fresh water fish. Farmed through sustainable farming methods, the fish are fed on a vegetarian diet with no stimulants on antibiotics. We sell within South Africa aswell as the UK. Our offices are based in Lusaka and Harare. To discover how we can supply your business, please see our website or contact us.

Visit us at: 4th Floor, 101 Union Building 101 Kwame Nkurumah Avenue Harare, Zimbabwe

Call: 00 263 4 707313 or 00 263 4 792583

www.lakeharvest.com

ZAMBEEF

“We are delighted that the AIM flotation has been completed successfully and with such high investor demand for Zambeef shares”

The three farms which form the deal – Nampamba, Chambatata and Kampemba Farms on the Zambian Copperbelt – extend over a total of more than 46,000 Ha. “These assets will provide the Group with the agricultural throughput for its processing operations which the board believes should generate additional value and higher margin whilst reducing impact of the volatility of commodity price fluctuations and an erratic supply chain on the Group,” CEO Francis Grogan said in a statement following the firm’s AIM listing. He added that Zambeef Group had raised $54.97 million in aggregate by way of both a rights issue of 33,558,580 new ordinary shares to existing investors via Lusaka Stock Exchange (LuSE). “We are delighted that the AIM flotation has been completed successfully and with such high investor demand for Zambeef shares,” Grogan, who is also cofounder of Zambeef, said. “We now look forward to working with our new and existing shareholders whom we would like to thank for their ongoing support as we continue to grow and expand. “The growing demand for agricultural products and consumer goods in sub-Saharan Africa together with the increasingly stable political climate in the countries in which we operate creates an exciting platform on which Zambeef can thrive.” Zambeef’s goal is to increase efficiency and capacity in its primary production facilities, ensuring it remains a low cost protein producer in the region. It also wants to expand its retail and wholesale distribution channels in order to “increase market penetration in the region”. To learn more visit www.zambeefplc.com.

Address: The Maudlins, Naas, Co. Kildare, Ireland 10 Niehaus Street, City Deep , 2001 Johannesburg , Sth Africa. Contact: Tel: +353 45 876633 Fax: +353 45 874918 Email: info@qkmeats.com

www.qkmeats.com

The QK Meats Group established in 1991, with its headquarters located in Naas Ireland. QK Meats S.A. is the newest addition to the Queally group of companies. It has the largest de-boning and retail packing facility on the continent of Africa. Our Products / Services include: • Beef, Lamb & Pork De-boning • Retail Packing: Beef, Pork, Lamb & Chicken • Manufacturing of Fresh & Frozen Meat ; IQF Mince / Dice – Beef, Pork, Lamb, Chicken • Cooked and Dried Meats • Cooked Beef, Pork and Lamb • Trading and Cold Storage around Europe and in Sth Africa. • Manufacturing of lean proteins and edible oils (beef and poultry – fresh and frozen) for processing industry. • Poultry MDM, Chicken Backs and Necks.

QK Meats oﬀer a service of frozen meat from Europe, and fresh and frozen from South Africa to all African Countries.

THE MAGAZINE FOR THE GLOBAL SOUTH AFRICAN.

PROPER TRAV EL CULTURE PEOPLE

ISSUE 15

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The real

Africa is an important market for Coke as it fights a street-by-street campaign to increase per-capita annual consumption. By Ian Armitage

CoCa-Cola

oca-Cola is the most recognised brand on the planet. There is nothing as global as Coke. It is a billion-dollar product, sold in 206 countries. It has been 125 years in the making. Coke has been in Africa since 1929 and in South Africa since 1938 when the first bottling plant and distribution centre were opened in Johannesburg, providing an important base for future growth in South Africa and across the continent. Today, Coca-Cola operates in nearly all of Africa’s countries; it is one of the continent’s largest employers, with 68,000 employees and 160 plants. Its impressive position is made possible by the hard work and commitment of its dedicated employees, as well as the strength of its local partnerships: bottlers, suppliers and retailers. Its main vision is to benefit and refresh the people of Africa. To truly succeed Coca-Cola has always known its products needed to be more than products. They needed to be reminders of good times and warm feelings. What many people don’t realise is that the Coca-Cola business is actually a local business. No matter where in the world it operates, its brands are produced, packed and distributed by bottlers that are deeply rooted in the communities in which it operates. South Africa is no different and a key contributor to Coke’s success here is its network of four bottlers: Amalgamated Beverage Industries (ABI) (a subsidiary of SabMiller), Coca-Cola Fortune (part of Coca-Cola SABCO), Peninsula Beverages (sometimes called Forbes Group) and Coca-Cola Shanduka Beverages SA (Pty). Each bottler is responsible for a specific geographic territory and they’re significant creators of opportunity in their communities, driving economic development through employment, procurement and other commercial activity. But these are more than bottlers. They are Coke’s partners in the true sense, sharing the same vision and mission. The bottlers do something The CocaCola Company doesn’t do: make CocaCola. Bottlers produce the beverages and 87

CoCa-Cola

deliver all those bottles and cans. They also distribute most of Coke’s entire line of beverages, stock and maintain everything at each outlet. South Africa is the largest Coca-Cola market in Africa and consistently ranks among the best performing countries in the world of Coca-Cola. Consumers love it. CocaCola is the preferred brand in South Africa for the fourth year running, is in the top five best employers in the country and has highstanding in terms of corporate reputation. But for Coke, Africa is still the untold story, and could be the big story, of the next decade. “There’s nowhere in Africa that Coca-Cola isn’t enjoyed. Being in a country is easy; you can go and set up a depot in every capital city. That’s not what Coke is about. It goes to every town, every village, every community, every township,” says Bill Egbe, President, Coca-Cola South Africa.

“there’s nowhere in Africa that Coca-Cola isn’t enjoyed. Being in a country is easy; you can go and set up a depot in every capital city. that’s not what Coke is about. It goes to every town, every village, every community, every township”

CoCa-Cola

The potential is huge. Africa is finally emerging as a viable market, riding a hoped-for wave of improving governance and demographics. Coke is in a streetby-street campaign to increase per-capita annual consumption of its beverages. To do so, Coca-Cola is applying lessons learned from its worldwide business with the hopes of having Coca-Cola within arm’s reach of every consumer. And according to Egbe, “Africa offers enormous opportunity for The Coca-Cola Company. In the last 10 years, $5 billion has been invested in the continent and an additional $12 billion is estimated to be invested by 2020.” Annual per capita consumption of CocaCola in South Africa is nearly 260 servings of eight ounces. Mexico is 665 servings per year where an aggressive courtship of small stores helped boost per capita of Coca-Cola beverages to the highest in the world. The possibilities are huge. John Ustas, the chief executive of ABI, Coca-Cola’s largest bottler in South Africa, recently described Africa as the “best market” for Coca-Cola. He said he believes there is opportunity for the “embedded” annual growth rate for Coca-Cola in South Africa to be pushed to as much as six percent. It is currently two. That opportunity lies in the townships, he said. “We are servicing just under 70,000 customers; we believe there’s potential for 200,000,” Ustas explained. He said he sees a lot of “similarities between South Africa and Mexico” and through investment – and by basically sending more reps out to the streets – the ambitious target was achievable. ABI accounts for about 60 percent of the Coca-Cola sold in South Africa, with the rest shared by the other three bottlers. Ustas is worth listening to. 90

Coke sees the potential too. CEO Muhtar Kent is looking to capitalise on the company’s position in Africa by adding beverage plants and developing packages and products to serve a growing population with rising incomes. To do that Coke has to get the product “close” to customers. In Alexandra, a dense township in Johannesburg, Coca-Cola has done just that. Last year, ABI filled streets with drink coolers and Coke signage. To keep the coolers full, the bottler extended credit to merchants who didn’t have the capital to take on inventory. Coca-Cola’s long-time CEO Robert Woodruff said that Coca-Cola should always be “within an arm’s reach of desire.” The Company is working to ensure that Woodruff’s vision in 1923 is a reality. Coke plans to spend several billion dollars in Africa over the next 10 years as part of its plan to double, by 2020, the $100 billion in global system revenue last year. Okay, you ask, why Africa? Well, mature markets such as the U.S. and Europe are growing at slower rates than many emerging economies. Coca-Cola has as its strategy

CoCa-Cola

to ensure its beverages are affordable and available. In Africa, most soft drinks are sold in returnable glass bottles. Returnable bottles help keep prices down so the company can reach more customers. Despite its plans for growth, Coca-Cola’s business in Africa is about more than just maximising profits, it is based on the idea that the health of its business depends on the health and sustainability of the communities in which it operates. It has put significant resources into HIV/AIDS education, prevention and treatment programmes, water projects, recycling, and education and infrastructure improvement. In addition, Coca-Cola has invested in economic development and entrepreneurship, through the development of spaza shops, taxi ranks and car washes in the townships, and retail training and support. The Coca-Cola Africa Foundation headquartered in Swaziland, was established in 2001 as a response to the growth and impact of the HIV pandemic. Today, the Foundation’s community activities focus on four key areas central to life in Africa: water, health, education and entrepreneurship. The Foundation’s RAIN (Replenishment Africa Initiative) Water for Schools programme has resulted in a nearly $4 million (nearly R30 million) investment in South Africa from Coca-Cola and the government. Coke has made a huge investment in terms of social and economic development and has a dedicated team that focuses on this market and develops sustainable small businesses. On 8 May 2011, Coke will be 125 years old. It started out in business in 1886, selling about nine servings a day. That number is 1.7 billion now. It used to have one product; it now has 3,300 beverage products. The company says its mission is to benefit and refresh everyone touched by their business. It seems they are delivering on that promise. There is a real magic around brand CocaCola. It conjures up personal memories. Happy times had. Happy times to come. As the business expands throughout Africa that magic will rub off on many more local communities, much in the same way as it has in South Africa. 92

Health, bubble

and sleek

Appletiser

Appletiser is a South African mother earth natural, a success story with a global presence, effervescing growth and profitability. And, MD Francois Rozon tells Food & Agriculture Outlook, a new packaging and marketing breakthrough could double its size over the next two years. By Colin Chinery

orty five years after pioneer fruit grower Edmond Lombardi created a unique apple drink in the Western Cape, the bubbles still rise, high, sparkling and clear, keeping Appletiser, the company that he founded, at the top of the refreshment and lifestyle market. With three products each lightly carbonated, 100 percent pure fruit and free of additives - Appletiser, Grapetiser and Peartiser - the Elgin Valley brand has a R1 billion annual turnover. Over the last decade revenue has tripled and profits quadrupled, a highly palatable return. Unsurprisingly South Africa is the biggest market. But almost 50 percent of production and turnover accounts from sales across 30 countries – 15 of them key with Britain the biggest, and Australia, growing at 30 percent in each of the last five years, moving up fast in second place.

MD Francois Rozon cites typical accolades from consumers fresh to his drinks:’ By far the best tasting fruit juice I’ve ever come across, ’ more than a fruit juice’, ‘wonderful aromas’ ‘authentic flavour’, ‘superb taste.’ “In a nutshell it’s the quality of the products, from the crystal clear transparency of the liquid, the champagne golden colour and fine bubbles, all the way to the packaging and the way it looks. The aroma - which in the case of Appletiser hasn’t changed over the past 45 years – makes for delicious fruit refreshment, something we are very proud of. We are a 100 percent pure sparkling single fruit juice, and this makes us something special and pretty unique out there in the market place.” Competition comes from across a diverse market, including flavoured waters, diet soft drinks and even iced teas. “It’s a large competitive set and the consumer can make a choice from a broad portfolio of brands,” says Rozon. 95

appletiser

“We want to make an impact and be something of an activist in working with others in making this valley, in terms of sustainable farming and water use, one of the first ‘Green Valleys’ in South Africa if not in the world. And that’s exciting” Appletiser market ascent has been achieved through principally its super premium offering, with its glass pack highly effective in meeting special occasion needs, as well as the hotel, café, and restaurant trade. But Appletiser has identified a market area where, says Rozon, “we haven’t really been playing.” This is the sweetspot – chiefly grocery and convenience – populated by bottles made of PET, recyclable polyethylene. “As a result we have developed a plastic bottle solution for Appletiser and our other flavours which we have just launched in South Africa, and will be in the UK and Europe early in the New Year. “It’s been a long process of overcoming a lot of difficult technical issues, and now we have the opportunity to potentially double in size again over the next two or three years. We shall be bringing to market firstly a single serve 350ml PET pack, which we call the daily edition, since you can take it along pretty much anywhere in your lunchbox or handbag. Also a 1.25litre pack, which we describe as our weekend pack perfect for 96

sharing at home with family and friends. This brings accessibility and affordability to consumers at a time of relatively difficult economic conditions. “So roughly for the same price of a traditional, special occasion 750ml glass bottle, we will be able to offer 66 percent more volume. It’s a breakthrough, allowing us to be far more competitive and play more as a premium soft drink than we have traditionally have been. So all in all, great progress and an exciting two or three years ahead of us.” Current challenges and growth considerations says Rozon include the ability to scale the business in countries that have not reached critical mass - most of the large overseas markets have local production – Appletiser shipping the flavour and aroma base. And with local blending of apple juice concentrate, water and Co2. “This requires having the right partner and the right investment behind the brand. Another challenge is to constantly look at the capabilities we have, and build upon them to keep up with

Appletiser

“If there’s a message to be sent I would say, Live a full life, a balanced life, and as a healthy alternative to traditional soft drinks make Appletiser part of your beverage repertoire”

growth to achieve our full potential.” He agrees there has been a powerful reappraisal among consumers. “In South Africa as elsewhere where we trade, the shopper has become a lot more discerning, especially following the recession we have just gone through. So we need to be able to offer a premium product, and make consumers understand the value we bring to them. That’s a key challenge for us.” Meantime the typical South African consumer, like those elsewhere, is faced with a personal challenge and potential life-killer: over weight and obesity. Sixty one percent of the population is affected, a figure that reaches 72 percent in Cape Town. Seventeen percent of urban domiciled one to nine year olds are obese, and the Heart and Stroke Foundation, concerned at the expanding waistlines of young South Africans, is asking retailers to stop enticing children into unhealthy eating habits. “I’ve always been a proponent of a balanced diet, and the great thing about our products is that they have a low glycemic index – GI - which means longer lasting energy to help us through the day. In Britain we have been part of the Government’s Five a Day initiative, and for a long time we

Unique in appearance, authentic in design and renowned consistency makes Fontana the leader in supply of closures to the Beverage Industry. Fontana continues to meet its commitments and obligations to sustainability by being able to offer various biodegradable closures and preforms from mid-2011. All products made from biodegradable polymer will biodegrade in an anaerobic (landﬁll) environment, breaking down through microbial action within the landﬁll, into biogases and inhurt humus, leaving behind no harmful materials. As recycling has always been Fontana’s top priority, one needs to take note that only 26% of all PET bottles are recycled. For this reason, Fontana believes that in order to contribute more positively to its environmental commitments, an alternative to recycling should be offered. The biodegradable Fontana Closures are an alternative.

www.fontana.co.za

were the only soft drink or sparkling beverage allowed in schools. Here in South Africa the Five a Day is not a Government programme but is industry-driven, an initiative which we are a part of. “Over weight and obesity is becoming a serious problem in South Africa and new findings are helping people realise that we have to do something about it. We believe Appletiser provides a good healthy alternative to a lot of products out there that don’t have the same integrity and vitality. If there’s a message to be sent I would say, Live a full life, a balanced life, and as a healthy alternative to traditional soft drinks make Appletiser part of your beverage repertoire.” Appletiser’s business philosophy says Rozon can be summarised “as a small enterprise that tries to be true to the integrity of its product, its brand, and where we try to be the best at what we do, putting the consumer at the centre of our values.” Edmond Lombardi died 29 years ago aged 84. By the time he retired he

had successfully transformed his 493 hectare farm some 70 km southeast of Cape Town, into a community of employees, striving for the fulfilment of their ambitions in the process of maximising the production of top quality apples, pears and plums. And on his death the pioneer grower and philanthropist created the EJ Lombardi Trust which today continues the work he began, notably in raising the living standards of the Western Cape labouring population. “This legacy and involvement is central to our existence and being,” says Rozon. “We are part of the small community of the Elgin Valley, and our aspiration is to contribute, whether in terms of economic development or educational programmes, whether for pre-school, High School learners, for our employees, or supporting the Empowerment initiative in the community. “We want to make an impact and be something of an activist in working with others in making this valley, in terms of sustainable farming and water use, one of the first ‘Green Valleys’ in South Africa if not in the world. And that’s exciting. It’s one of the things we do in the background, but we do it because we believe in it. It’s our home and it’s where we come from.” 99

Honest, nutritious

free

and

Freedom Foods’ philosophy is simple - everyone can “benefit from delicious food that is free from the stuff you don’t need so that your body can work better”. By Robert Michaels

100

ustralia’s Freedom Foods is the leading branded manufacturer of foods free from key allergens such as gluten and nuts. The company is based in Taren Point, Australia, and, as of December 5, 2003, became a subsidiary of Freedom Foods Group Limited (FNP), a diversified food company, which operates in the health and wellness sector in Australia and New Zealand. FNP, through the Freedom Foods business, offers free-from breakfast cereals,

Freedom Foods

nutritional snack bars, biscuits, and soy and rice beverages. The company also sells branded Alaskan salmon products under the Paramount brand and Atlantic herring sardines under the Brunswick brand, as well as supplying retailers with private label sardines in New Zealand. In addition, it is a leading contract manufacturer through Pactum Australia of UHT dairy, soy, rice milk and other valued added beverages for retail supermarkets and other branded manufacturers.

The FNP group markets its products under the Freedom Foods, a2 milk, So Natural, Australia’s Own, Paramount, and Brunswick brand names. “The company was formerly known as Freedom Nutritional Products Limited and changed its name to Freedom Foods Group Limited in December 2010,” says Rory MacLeod, Freedom Foods Group Limited’s executive director, who spoke with our researcher. “Freedom Foods is a leading brand in 101

FREEDOM FOODS

the “free from” market segment, which comprises food and beverage products manufactured free from key allergens such gluten, wheat, nuts and dairy, while also maintaining a superior nutritional profile,” Freedom Foods Group Limited’s website says. “The market for “free from” products continues to expand in Australia and internationally reflecting the rising prevalence of food allergies and intolerances and the increasing consumer demand for health conscious products that eliminate potentially unhealthy ingredients. “Since acquisition by FNP in 2003, the business has been transformed with growth in sales and profitability. In recent years, however, Freedom Foods ability to meet the growing demand for “free from” food and beverages has been limited by the requirement for strict manufacturing and quality control processes and a lack of available quality manufacturing capacity in the Australian market.” To meet this demand and improve financial returns, in 2008 FNP management acquired a 12,000sqm food grade manufacturing site at Leeton in regional NSW and undertook a major capital equipment program. The site today has a “integrated scale manufacturing capability” for a broad range of cereals, snacks and baked products “free from” key allergens such as gluten, nuts and dairy. “This investment represents a significant transformation of the Freedom Foods business model and provides an opportunity for growth in sales and profitability for the future,” FNP’s website says. “The capital investment project has been implemented to provide maximum flexibility to produce a range of products at lower cost, with capacity for growth in product range and volume. Newly developed quality systems and “free from” processes from raw material to finished product will enable the business to guarantee to its consumers “free from” compliance and build competitive advantage relative to other players in a fragmented market. “The Leeton site is one of only two Australian owned broad capability cereal manufacturing operations in Australia, with equivalent other operations owned by major multinational food groups.” 102

MILKY OPPORTUNITY Freedom Foods Group recently announced that exercised an option to take a further 18.7 million fully paid ordinary shares in Auckland-based dairy company A2 Corporation Ltd. The option exercise resulted in FNP becoming the largest single shareholder in A2 Corporation with a total stake of 26.4 percent, including partly paid ordinary shares on issue. A2 Corp has said it will commission its own processing plant in southwest Sydney next January to meet a growing demand for A2 milk in Australia.

“Freedom Foods is a leading brand in the “free from” market segment”

The new $A7.5 million factory will process 10 million litres of milk a year, some of it additional to 20 million litres of milk already supplied by contractors. A2 Corp last year gave ASX-listed Freedom a 25 percent stake after its shareholders approved a deal to buy up the remaining 50 percent stake in Australia’s A2 Dairy Products Pty Ltd that they did not already own. The deal gave A2 Corp exclusive rights for the production and sale of A2 milk products in Australia and Japan MacLeod told our researcher: “Freedom Foods is a diversified food company operating within the health and wellness sector. “We have consumer brands with leading or growing market shares in their categories, including Freedom Foods, a2 milk, Australia’s Own, Paramount and Brunswick, and a growing business in UHT contract manufacture in Pactum Australia.” Website: www.ffgl.com.au 103