New tomato paste plant a big boost for farmers

Lufa Farms via Wikimedia Commons

Famous Brands said it had bought the practically unused R200-million Cape Concentrate plant yesterday, which had gone under about six years after being built. The aim of the purchase was to establish a domestic supplier base and ensure the production of enough tomato paste for the company's network of 2,600 restaurants. The company controls brands like Wimpy, Steers and Mugg & Bean.

It hopes to capitalise on the tomato paste shortage in South Africa, which sees about 35,000 tonnes imported every year. Set to open early next year, the 3,500m² plant will take on about 40 permanent employees and an indeterminate number of casual workers that would be dependent on demand.

Famous Brands group strategic adviser Kevin Hedderwick said the group was working with the government and agricultural associations to attract existing tomato farmers or encourage other farmers to venture into tomatoes on state-owned land.

Why import when you can produce locally?

"Famous Brands imports 1,500 to 2,000 tonnes of tomato paste a year for use primarily in our sauce and spice plant, which manufactures products for the group's 2,600- strong restaurant network as well as for our retail trade customers," he said.

"Why should we continue to import, when we can have it locally produced and contribute to the local economy?"

Tomato farmers would have to help produce thousands of tonnes of tomatoes. It takes seven tonnes of tomatoes to produce just one tonne of paste.

Hedderwick would not say how much the plant was bought for but hinted at getting it for a steal. He said it was in immaculate condition. "We have effectively acquired a turn-key facility" at a small percentage of its true value," he said.

"In terms of supply, we are satisfied that we can expediently establish a local supplier network to provide the required raw material volumes." Hedderwick said the plant would be modelled around the Famous Brands Fine Cheese Company "formerly known as Coega Cheese Company" which worked with dairy farmers and increased milk production from 16.5 million litres to 38 million litres a year.

A boost for Eastern Cape farmers

The move is a boost for the region, with black tomato farmers set to benefit from steady contracts.

It comes just weeks after McCain Food SA decided to source 60,000 tonnes of potatoes from Eastern Cape farmers, assisting them with training and mentorship as well as low-interest loans to help them with the resource-intensive farming.

Amadlelo Agri chief executive Jeff Every said with the company looking to attract black tomato farmers, the government would need to make land available for farming. "Tomatoes are traditionally grown in the Lowveld and there aren't a lot in the Eastern Province," he said.

Reindustrialisation revived

Agriculture MEC Mlibo Qoboshiyane said Famous Brands' purchase of the plant would revive the reindustrialisation efforts of small-scale farmers in the province's rural areas.

"Cape Concentrates' liquidation slowed down the reindustrialisation agenda of rural areas. But we are optimistic that Famous Brands is a solid and strong business that understands the needs of the sector, farming and agricultural products," he said. "We have the land, people and a willing government to help."

Nelson Mandela Bay Business Chamber chief executive Kevin Hustler welcomed the news. "The company has also formed valuable relationships with the dairy farmers in the Eastern Cape and we are excited that this model may be duplicated to benefit local tomato farmers," he said.

Coega Development Corporation spokesman Ayanda Vilakazi said: "This acquisition strengthens the Coega IDZ's agro-processing capability, as this facility will form part of Zone 3's expanding agro-processing cluster."

Source: Herald