Business Day (Johannesburg)

South Africa: Aiming for Food On Many New Tables

Johannesburg — FOOD manufacturer Foodcorp's exports are a small part of its business, but not by design, says CEO Justin Williamson.

The company, which dates its existence back to 1992 when Kanhym merged with Fedfood, stables well-known brands such as Nola, Mageu Number One and Ouma Rusks.

Foodcorp turns over about R3bn a year, of which less then 10% is earned from exports. In five years , the company aims to have pushed this up to about 20%, and expects about R1bn a year to be coming in from exports within four years.

Williamson says Africa will be a major export destination and the company is putting strategies in place to achieve its targets. Its acquisition of First Lifestyle in June, which bought Piemans Pantry into the fold, has added to the group's export potential, he says. Two new pie lines are being installed that will enable the company to export Halaal-certified pies to the Middle East. A new factory is also under construction, which will double capacity within the next year.

First Lifestyle and Foodcorp are expected to have a combined turnover of R4,5bn, with Piemans Pantry to be incorporated into Foodcorp's stable of brands that includes Nola mayonnaise, Yum Yum Peanut butter, Ouma rusks, Mageu No One, Bobtail and Dogmor dog foods, Glenryck pilchards and Ouma flour.

Foodcorp is SA's largest black-controlled food company, being 65% owned by Pamodzi Investment Holdings. Management owns a 15% stake and employees the balance.

Williamson says the company is also gearing up to comply with European standards so that it can start exporting pies there too. However, with recent health scares such as avian flu and mad cow disease, the Europeans specifications have been tightened and complying with them will be challenging.

Despite this, Williamson sees Europe as a great opportunity, especially with the plethora of London pie shops to supply. Other parts of Africa are another feasible export destination, beyond just neighbouring countries, and with this in mind the company has recently developed a larger pie that it is to launch soon. "There is a massive opportunity," Williamson says.

Seamans, a meat product company that was acquired as part of the R1,2bn First Lifestyle deal, is seeing demand far exceeding what it can supply , and the factory is to be relocated and its capacity doubled.

Foodcorp's marine division accounts for the bulk of its exports. Williamson says hake and lobster are the star performers, with about 6000 tons of hake being dispatched to foreign destinations each year, mostly to Spain and Portugal.

Globally, white fish is popular due to its health benefits. "There's an insatiable demand from Europe for good quality white fish," Williamson says. Only the larger fish -- about half of what the company catches -- are suitable for export. Smaller fish are sold locally at about the same price as what is achieved offshore.

Foodcorp has a large freezer vessel that spends between four and five weeks at sea at a time, catching about 400 tons of fish. With a complete in line factory on board, fresh fish goes in one end and wrapped frozen fish comes out the other.

But the biggest demand is for fresh fish, which is caught and gutted before appearing on supermarket shelves about ten days later. Foodcorp has two vessels focusing on this market.

Lobster, a popular delicacy in the Far East, is exported in various forms. The company has a quota that this season allows it to catch 70 tons of West Coast lobster, which is found in shallow water.

The lobster is either exported live, whole frozen or whole cooked. Currently, live lobster fetches the best price so the company has skewed its supply accordingly. Once caught, the lobsters are kept in a tank of sea water for a week to allow them to clean themselves naturally. They are then chilled to 4°C, packed into polystyrene boxes while in a state of hibernation and loaded onto a plane.

After arrival, the lobsters are revived and any missing or broken tentacles are replaced with spare parts as the target market insists on whole shellfish.

Williamson says the rest of the company's business benefits from exports by default. As it supplies large supermarkets such as Shoprite that have a presence on the continent, products such as Nola end up on foreign shelves without Foodcorp knowing about it. Its rusk brand, Ouma, is also exported in substantial quantities to places like London, but not by Foodcorp directly.


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