The unveiling of JSE-listed Clover’s newly expanded Queensburgh production and distribution facility, in Durban, KwaZulu-Natal, this week, marked the conclusion of the company’s aggressive three-year, multimillion-rand Cielo Blu project.

The branded consumer goods and beverages group embarked on the revamp at the end of 2010 – when Clover listed on the JSE – to rectify historical structural and supply-chain inefficiencies and mitigate input and high transportation costs to set a solid platform for future growth.

Clover CFO Jacques Botha said by 2010, Clover had reached capacity and was not maintaining the “required customer service levels”.

Inefficiencies had emerged, including product not being available at time of picking and difficult stock management, resulting in losses of sales and stock.

Further, a steady migration of dairy farmers to the coast required Clover to relocate and reposition its inland dairy production facilities to Pinetown, in KwaZulu-Natal, and Port Elizabeth, in the Eastern Cape – closer to the raw materials source – as well as expand and increase the production capacity of all its factories.

The 2010 listing of Clover had attracted R500-million, of which R350-million was earmarked for the various value-enhancing and expansion initiatives of Cielo Blu.

About R184-million of the earmarked project capital was allocated to Clover’s nationwide distribution capacity expansion, with the expansion of the Queensburgh distribution facility accounting for R77-million.

“The Queensburgh facility was a major element of our main capital expenditure programme over the past three years, marking the final step in the implementation of Project Cielo Blu,” Clover chairperson Werner Büchner said during a site visit at the facility.

The facility, which was now the company’s largest factory and second-largest distribution centre when combined with the nearby Pinetown facility, produced fresh milk, ultrapasteurised (UP) milk, flavoured milk, fresh juice and maas.

It was originally acquired as a greenfield site to house the then expanding Congella branch in 1985.

“Today, the site spans 63 ha, the total area of the buildings under roof measures 32 571 m² and the total floor area equals 46 673 m²,” Büchner said.

The Durban-based expansion project kicked off in February 2012 with the Phase 1 installation of a new chiller and three new loading bays, which were commissioned in November 2012.

The Phase 2 implementation saw the group “move a mountain” when 55 000 m3 of rock was removed from an existing hill on the property, Botha said.

Over six months, more than 12 500 kg of explosives had been used to blast 29 199 m³ of rock, while ten trucks hauled away 1 358 m³/d.

The project was concluded in September 2013, when Clover installed a second chiller, an ambient warehouse and a new battery bay during the third and final phase.

The Queensburgh facility, which procured an average 290 000 ℓ/d of milk from about 52 milk producers in KwaZulu-Natal, now boasted a 47% and 100% increase in chilled and ambient capacity respectively.

The potential average primary- and secondary-volume throughput was boosted to almost 1.5-million litres or kilograms a day of product.

Clover had also separately launched a R95-million production-related project to introduce new products and technologies at the site, which brought the total investment to reorganise and expand the facility’s production and distribution capacity to R171-million.

The production project, which started last year, culminated in the installation and commissioning of a new extended shelf life (ESL) plant, which increased the shelf life of fresh milk from 12 days to 18 days, and the installation of the new UP processing and aseptic filler, enabling Clover to produce UP milk with an extended shelf life of 30 days, said Botha.

The ESL project also resulted in output of 30 000 ℓ/h, compared with the 15 000 ℓ/h produced on the old technology.

“The introduction of fresh milk with a minimum 18-day shelf life and UP milk with an extended shelf life of 30 days are both industry firsts and reinforce Clover’s position as the market leader,” said Büchner.

Clover maas was also successfully reintroduced and produced in the facility, gaining up to 5% in market share since January 2013.

“The additional products, new cold room and ambient warehouse added to the facility are already delivering benefits for Clover and we will continue to invest in value-adding expenditure programmes over the long term as we aim to mitigate rising input and transportation costs,” Büchner concluded.