The Capespan Group has acquired full ownership of Metspan and says it will be the springboard for further investments in the Far East region, especially into China.
Metspan, operating from Hong Kong, has been the focus of the Group’s marketing in the Far East for the past 11 years. It was originally founded in the pre-deregulation period in 1996 as a 50-50 partnership between Outspan International and South-African company Metcash Trading Africa. With the merger of Outspan International and Unifruco Ltd in 1999, it became part of the Capespan structure.
Louis Kriel, Capespan Group’s acting managing director, announced that Capespan had begun a series of planned steps to strengthen its position in the Far East. “China especially is one of the future growth areas globally. Therefore, 100 per cent ownership of Metspan certainly facilitates Capespan’s expansion into the burgeoning Far East markets. Opportunities abound in this dynamic region and Metspan is a well-established vehicle to facilitate our growth here.”
A Capespan Group statement said Metcash Africa agreed to sell its shares in Metspan to Capespan because fresh produce procurement and sales didn’t constitute part of its core business. The statement did not elaborate on the value of the transaction.
Operating as a risk taker in a trading environment as both buyer and seller of fresh produce, Metspan’s main office is in Hong Kong with a procurement sub-office in Cape Town. It sources fresh produce globally, servicing key customers in 12 Asian retailer and wholesale distribution markets, including Hong Kong, China, Malaysia, Taiwan, Korea and Thailand.
Mr Kriel indicated that other deals were in the negotiation stage and would be announced when concluded. “We’re very pleased with negotiations so far,” he said.
In recent times Capespan has been reported to be investigating a number of investment opportunities in the region. While the Group’s full-owned subsidiary, Goldspan, has been firmly established in Japan, Metspan remained responsible for most other trading in the region. Part of these investigations has been focused on India and there has also been speculation about possible direct investments in China.
“We have concluded our initial investigations in India and we now have to consider the next steps,” Mr Kriel told Fruitnet.com. He said Capespan has been the market leader amongst South African players in Asia and has established strong ties with retailers such as Park ‘n Shop in Hong Kong, as well as with other trading businesses.
“Our view of the Far East is that we now have the footprint and structure to further engage with the trade, specifically the emerging global retail business who are establishing themselves in the region,” explained Mr Kriel. “Metspan gives us the opportunity to do so, specifically also looking at China.”
Mr Kriel said it was important for South Africa to promote its products and its brand in the region. “It is a quality conscious marketing region and we want to build our image and our brands.”
The new move is not expected to bring any changes in the Metspan structure and staffing. “Gerd Börn remains as managing director and has a wealth of experience in trading in the region. It will be very much business as usual, but with the added bonus that we can now move ahead with consolidating our position further.”
He pointed out that there is great potential for South Africa to expand its influence in the region. “We are closer to the market than many of our competitors and there are so much more shipping opportunities today. Our fruit sector is strong and continues to develop varieties suited for this region.”
He says Capespan’s position as global supplier of fruit also offers unique opportunities of both importing fruit to and exporting from countries in the region. He cautioned, however, that it is a complicated region to establish business and new ventures do not happen overnight.
“We are pleased with the way things have developed in Japan. Goldspan has been established as the leading citrus importer and distributor and it now also has a significant grape and sub-tropical business. Its integrated product and marketing approach is working very well.”
He said establishing business in India remains a priority for Capespan, but there are tariff barriers which makes it difficult for South Africans at present.
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