Fruit farmers relieved as Tiger Brands sells canning factory for R1

Tiger Brands said in a statement it would sell the Langeberg and Ashton Foods business as a going concern to NewCo, a newly established company comprising a consortium of producers and other parties with vested interests.

The deal was some five years in the making, with Tiger Brands having announced in 2020 it intended exiting from its deciduous canned fruit business.

The canning factory was founded in 1940 and was considered an important contributor to the region’s economy, providing employment to more than 3 000 seasonal and permanent workers. Fruit, such as peaches, pears, apricots, apples and guavas, were processed.

Producers in the consortium include members of the Ashton Fruit Producers’ Co-operative, established in 2020, made up of about 140 producers from the Robertson, Ceres, Breede River and Klein Karoo areas. Chairperson Anthony Dicey told Farmer’s Weekly the announcement came as a relief and brought “new hope”.

“The area is largely dependent on employment provided by the canning industry and wine grapes. The closure of the factory would have been devastating.”

Dicey said although they were only paying R1 for the canning business, the new company would have to supply between R800 million and R1 billion in capital for operating expenditure over the next year. This was in addition to investments by producers at farm level, who were expected to once again start establishing orchards dedicated to specific canning cultivars.

“With the uncertainty over the past five years, producers had not necessarily been establishing orchards. They will now be more confident that their fruit will have a home,” Dicey said.

CEO of the Canned Fruit Producers’ Association Jacques Jordaan said the announcement was positive for the region, the producers and for agriculture in the Western Cape as a whole. He said South Africa had a reputation for producing some of the best canned fruit in the world, but the uncertainty over the past five years had resulted in international market share losses.

Jordaan said the sale was viewed as a “major transaction” and would be subject to relevant processes, including approval by the Competition Commission. He said Tiger Brands would continue to manage operations during the transition period. NewCo would also use this period to appoint its new CEO and management structures.

However, with the season kicking off in May/June, he said they were hoping to expedite the process. He said they had to hit the ground running as soon as possible, with purchases, orders and planning for the new season already necessary.

According to Tiger Brands, it would commit R150 million towards the establishment of a community trust to benefit the broader Langeberg community through socio-economic development initiatives.

Tiger Brands CEO Tjaart Kruger said the announcement proved the company’s commitment to securing an outcome in the best interests of all stakeholders.

“The success of this sale will ensure the sustainability of the South African deciduous fruit industry and consequently improve the livelihoods of the Langeberg and Ashton Foods employees and the broader communities in these areas,” he said.

“The community trust will ultimately hold a beneficial interest equal to 10% shareholding in Newco, with the consortium holding the balance of the equity.”

According to Tiger Brands, the Langeberg and Ashton Foods division produces canned fruit, including peaches, pears, apricots, apples and guavas, and fruit purées, largely for the export market.

It supplies Tiger Brands’ Culinary division with canned fruit for KOO, pulps for All Gold, Hugo and KOO, and purées for Purity. More than 80% of the canned fruit and purée products are exported to markets that include Europe, China, Australia and Japan.

Source: Farmersweekly.co.za