Plan promises better competition for fruit canning

The fruit canning industry task team recently finalised a business plan to enhance global competitiveness.Issue Date: 16 February 2007

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The fruit canning industry task team recently finalised a business plan to enhance global competitiveness.

The rest of the canning industry has until 19 February to comment on this plan, with an official launch scheduled towards the end of the month. The plan was initiated about three years ago when increased market competition and the strengthening rand led to a dramatic drop in canned fruit prices.

The reduced market prices, together with increased input costs, impacted farm profitability. Most producers were found to operate at a loss when depreciation (the cost of replacing orchards and equipment) was also accounted for, according to Wiehahn Victor, CEO of the Canning Fruit Producers’ Association and spokesperson for the task team. The task team identified three ways of enhancing profitability: reducing production costs, increasing production efficiency and tackling fruit prices.

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Exchange rates, market conditions, consumer preferences, market access, quality and cost savings were identified as factors affecting prices. Trade and industry deputy minister Rob Davies said his department supported the plan’s implementation. ”It is imperative for the team to show progress as this will allow for continued support,” he said while visiting canning company Langeberg & Ashton Foods.

Davies also encouraged industry leaders to “make their case” in forums both locally and abroad and said ultimately industry growth would lead to more jobs in this labour-intensive environment. The memorandum of understanding, which would govern the relationship between government and the SA Fruit and Vegetable Association, was also reviewed.

Regulatory issues that don’t exist for SA’s international competitors were identified as one of the major threats to the industry. “We need the support of government to ensure we are able to level the playing fields in international trade so that we may prosper for the benefit of all our stakeholders,” said Nassos Martalas, chief operating officer at Langeberg & Ashton Foods.

Victor added that government could contribute to industry sustainability. They could negotiate more favourable market access with the EU and help the industry to diversify and expand markets in other countries. – Glenneis Erasmus