OVERVIEW
Agriculture Avocados are proving a fruitful investment. SECTOR INSIGHT Companies are bidding for troubled Tongaat Hulett.
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he biggest tomato producer in the southern hemisphere has started planting and trading in avocados. ZZ2’s new R128-million processing facility in Limpopo for avocados and tomatoes is complete. With floor space of 11 200m² the facility is large, but then everything about ZZ2 tends to be on a big scale. The company’s website gives a figure for tomato production of 190 000 tons, a total which allows ZZ2 to cater for all market channels and income groups. The main operations of the company are in Limpopo but it has facilities in the Western Cape, Eastern Cape, Gauteng, North West, Mpumalanga and Namibia. ZZ2 grows a large assortment of fruits including mangoes, onions, dates, cherries, apples, pears, stone fruit, almonds and blueberries. There are ambitious plans to increase market share in avocados, a highly sought after and popular export product. A joint venture between ZZ2, Mission Produce and Criterion Africa Partners will see more than 1 000ha of avocado orchards developed, but ZZ2 will continue to develop other orchards independently. So far, the Selokwe Agri JV has planted 250ha. The EU market has the best potential, with average per capita consumption in that area currently less than half that of the US. South Africa has an edge over Peru in that the season begins before the South American’s peak period and the aim is to supply the popular Hass variety all year round. Core Fruit has been contracted to handle the logistics and transportation of product to Europe. SOUTH AFRICAN BUSINESS 2024
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According to Fruit SA, 324 000 South Africans are employed in the fresh fruit industry, which accounted for 35% (or R63-billion) of the country’s agricultural exports in 2021/22. South Africa is the world’s second-largest exporter of citrus fruit. A national export record was achieved in 2020, with 146-million cartons of fresh citrus being exported (second only to Spain). In the sugar industry, South Africa has for a long time been used to the dominance of two large companies, Illovo and Tongaat Hulett. The latter group going into business rescue in 2020 was a major shock, not only to the many businesses which rely on the sugar producer in KwaZulu-Natal, but because the company has a long history and has become one of the biggest corporate names in the South African economy. In 2022 seven former Tongaat Hulett senior executives appeared in court on charges of fraud for allegedly backdating sales agreements of the company’s property division to score better bonuses. The business rescue practitioners (BRP), Metis Strategic Advisors, managed to keep 2 500 employed at the company and PHOTO: ZZ2
