Fruit producers have made urgent requests to the Western Cape provincial government, as well as national government, to intervene in food manufacturer Tiger Brands’ decision to close down its canning factory in Ashton, in the Western Cape, which agriculture industry association Agri SA believes will have a devastating impact on more than 4 500 workers and on the surrounding community.
“Given the essential contribution of this facility to the national and provincial economies, government needs to provide assistance by partnering with the parties to facilitate investment in the facility,” Agri SA said in a statement issued on June 22.
The notice of intention to close the factory issued by Tiger Brands comes soon after the May 12 signing of the Agriculture and Agro-Processing Masterplan, which was supposed to facilitate job creation and bolster investment into the industry.
The factory is the biggest of its kind in South Africa and is one of only two fruit canning factories in the country.
“The factory played a vital role in enabling South African canned fruit to occupy the niche position it does in the world market,” Agri SA said.
Owing to the factory, South Africa is ranked in the top seven fruit canning countries globally by production, bringing in hundreds of millions of rands in foreign currency.
Tiger Brands initially decided to divest from this factory two years ago. However, a consortium of 160 producers entered into negotiations with Tiger Brands to acquire the factory.
However, the consortium will require an additional R200-million to R300-million to close the deal.
Given the latest announcement from Tiger Brands, these producers will need to secure the necessary funds in less than 60 days.
“Without support from government and cooperation from Tiger Brands, the producers’ initiative will fail, and the fallout will be catastrophic,” Agri SA said.
The factory’s main inputs are cling peaches, bulida apricots and bon chretien pears, which are sourced from 2 250 ha of canning fruit orchards. These orchards have been planted specifically in the Klein-Karoo, Ashton, Robertson, Bonnievale, Breërivier, Wolseley and Ceres areas for the purpose of canning.
If the factory closes as Tiger Brands intends, about 300 farmers will be left with no alternative market for their fruit because the only other fruit canning factory in South Africa, owned by food producer Rhodes Food Group, is already running at full capacity. The farmers would have to destroy their orchards so that they can perhaps use the land for farming alternative products.
Agri SA said the impact of the announcement was already being felt, with labour brokers reporting that their teams are sitting at home as producers have stopped pruning.
Tiger Brands has indicated that 250 permanent jobs and 4 300 seasonal jobs would be affected at the peak of the season.
Moreover, the factory supports much of the Ashton community, which would now face socioeconomic ruin. The factory is the biggest single source of income for the Langeberg municipality.
In addition to factory workers, the facility provides employment for thousands of farmworkers in Ashton and in the fruit production regions. More than one permanent job opportunity is associated with each hectare of fruit orchard, with 2 250 permanent farm workers’ livelihoods now in jeopardy.
Additional seasonal labour is used for winter pruning, thinning, summer pruning and harvesting.
The Tiger Brands canning factory has been in operation for more than 70 years, supplying fruit for Tiger Brands’ KOO brand, as well as international brands such as Silverleaf and GoldReef. The factory initially consisted of two separate factories owned by the producers and a local entrepreneur. Tiger Brands subsequently bought these factories and consolidated them into one.
“At a time when job creation and economic growth are desperately needed for the maintenance and recovery of the national economy, the agroprocessing sector cannot afford this closure,” Agri SA said.
The association said that it was essential for Tiger Brands to negotiate with fruit producers and factory workers to find the best possible solution for all the affected stakeholders.
“With the Agriculture and Agro-Processing Masterplan now in place, it is vital that government take up its role in supporting the growth of this important employer for the Western Cape,” Agri SA said.