Kamogelo Olaitan
The imminent closure of Tiger Brands canning factories in the Western Cape will leave more than 300 fruit farmers with no alternative market for their produce.
Tiger Brands’ plans to close their Langeberg and Ashton canning factories were developed about two years ago after what they called “a strategic review to focus on manufacturing, marketing and distributing everyday branded food and beverages”.
This was pushed recently as the prices of tin cans kept going up, with Tiger Brands needing more than 350 million a year. The increase is blamed on the price of the base metals used to make the cans, as well as increases in shipping costs to get the product into the country.
The closure will spell trouble for local fruit farmers, leaving little alternative use for about 90 tons of their produce.
AgriSA, a federation of agricultural organisations, said 160 producers had put up an offer to purchase the factories but they needed up to R300 million in additional funds within 60 days from 9 June to seal the deal.
In a statement on Wednesday Christo Rheede, executive director at AgriSA, said there were 2,250 ha of canning fruit orchards planted specifically for canning at the factories.
“The knock-on effect of the closure would be disastrous for 300 producers who don’t have alternate markets for their produce,” Rheede said.
Jacques Jordaan, CEO of the Canning Fruit Producers’ Association, said they expect immediate losses not less than R1 billion.
Jordaan said that diverting the fruit to the local fresh produce market would cause an oversupply and put pressure on the industry.
“The fruit can’t be exported or put in the local market; it will flood the local market,” he said. “The only other canning factory, Rhodes in Tulbagh, that factory is the smaller one of the two, and they’re already running over capacity.”
In a statement Tiger Brands said: “Langeberg and Ashton food division produces purees and canned fruit primarily for the export market in an industry riddled with the impacts of trade barriers and heightened competition in the local produce market. Coupled with that, fluctuations in exchange rates and global crop yields added further volatility.”
More than 200 people will lose their jobs and 4 300 seasonal jobs will be affected at the peak of the season.
Image source: @TheCapeArgus
