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Mike Knowles



Thursday 25th October 2012, 10:13 London

RSA: sustained investment needed

Fresh produce industry leaders call for continued commitment to developing South Africa's export business

RSA: sustained investment needed

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The future success of fruit exporters in South Africa depends on gaining more support from government to achieve access in emerging markets, on continued investment in logistics and marketing, and on the future development of environmentally and ethically sustainable trading practices.

Those were among the most notable conclusions to emerge from last week's Eurofruit Congress Southern Hemisphere, the annual fresh produce industry conference and networking event, which brought together expert speakers and panellists from across the Southern Hemisphere and drew almost 250 delegates from around the world to the NH Lord Charles hotel in Somerset West near Cape Town on 17-19 October.

South Africa and other Southern Hemisphere fresh produce suppliers should be able to capitalise on potential new opportunities in developing economies, delegates heard, with speakers identifying Asia, Russia and the Middle East in particular as the areas showing particular promise.

However, Charles Hughes of apple and pear exporter Tru-Cape Fruit Marketing told the conference that a lack of support from government bodies meant not enough progress had been made on securing trade agreements in those regions. "I feel that Asia is the region we should be targeting but the major issue is market access," he said. "We have problems with China, Vietnam and Thailand. The latter has been closed and that has probably cost South Africa US$70m-80m in lost income. If the country doesn't have access, the large size and potential of the market is completely irrelevant."

Left to right: Eurofruit editor Mike Knowles alongside Lindi Benic of Hortgro/SATI, Andre Jooste of NAMC, Charles Hughes of Tru-Cape Fruit Marketing and Parth Karvat of Yupaa Group of Companies.

Left to right: Eurofruit editor Mike Knowles alongside Lindi Benic of Hortgro/SATI, Andre Jooste of NAMC, Charles Hughes of Tru-Cape Fruit Marketing and Parth Karvat of Yupaa Group of Companies.

Alternative options

Andre Jooste, who heads up research into markets and economic development on behalf of South Africa's National Agricultural Marketing Council (NAMC), suggested the development of exports to other less well publicised parts of the world might soon be worth pursuing.

"In the medium term, Asian markets will be those to target `as a supplier`, but in the long term I see Africa as the major growth area," he declared. "We must take note of the shift in global trends, taking into account climate change, population growth and demographics in terms of areas of supply. There are lots of markets with untapped potential for South Africa; markets like Poland, Benin and Nigeria to name a few. There are huge opportunities across Africa in particular."

There was some good news for South African fruit exporters looking to expand their presence in the Russian market as well as those wanting to consolidate growth in Europe, with Anton Kruger of the Fresh Produce Exporters' Forum revealing that South Africa's Department of Trade and Industry had agreed to fund a national stand at next February's Fruit Logistica in Berlin as well one at World Food Moscow in Russia next September.

"The industry itself will continue to fund a shared stand at Asia Fruit Logistica in Hong Kong," he added, confirming that arrangements put in place for the recent edition – after the DTI withdrew its funding – would be the same in 2013.

Investment required

Elsewhere, Danie Schoeman, managing director of logistics service provider FPT Group, told delegates that the country's export trade stood to lose a great deal if it failed to invest in its supply chain.

"A more integrated, holistic and systemic approach is required which will ultimately increase profitability," he said. "The ultimate cost of cost-cutting through a piecemeal cut, cut, cut approach could be that you cut yourself out of business."

He added: "In the Southern Hemisphere, we are inextricably connected to global supply chains. Cost containment is one of the top five supply chain challenges, but it is not the same as cost cutting."

Good nature

Ethical trading, meanwhile, has become a priority for more and more exporters in South Africa and Jacques Du Preez of Hortgro underlined that development when he confirmed the organisation's latest national promotional campaign would focus on efforts to foster corporate responsibility in the industry. "Our marketing campaign will look to drive demand, consumption and ultimately sales of South African fruit," he said.

Sustainability in environmental terms has also proven important to a growing number of suppliers, said Shelly Fuller, project manager for industry initiative Confronting Climate Change. "We look at the best quality fruit at the best price, factoring in environmental factors," she said. "To be sustainable as a business, it makes sense to cut costs in areas such as pollution."

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