Jul 12, 2022
Tiger Brands Extends Operations at Fruit Unit for Further Season
, Bloomberg News
(Bloomberg) -- Tiger Brands Ltd., Africa’s largest listed food maker, will extend operations at a fruit processing facility in South Africa’s Western Cape province for a further season, postponing its closing that could result in the loss of more than 4,000 jobs.
The company will continue operating the Langeberg & Ashton Foods facility 174 kilometers (108 miles) east of Cape Town after reaching an agreement with organized labor, employees and members of the Canning Fruit Producers Association, Tiger Brands said in a statement on Tuesday. The extension will allow more time for a potential buyer to acquire the business and also ensure the upcoming season’s fruit crop can be processed.
A number of parties have expressed interest in buying the facility that produces canned fruit peaches, pears, apricots, apples and guavas and fruit purees largely for the export market. However, the conclusion of any transaction would not take place in time for a new owner to complete preparations required for the forthcoming crop, the company said.
Farm lobby groups and the Western Cape’s provincial government flagged potential job losses following Tiger Brands’s announcement last month that it would shut down the plant after failing to find a viable buyer since laying out plans two years ago to exit the business. The facility employs 250 permanent people and the number of seasonal workers peaks at around 4,300 during the apricot processing season, which starts in November, according to Tiger Brands.
About 300 farmers would have no alternative market for their fruit if the Tiger Brands plant closes because the other fruit-canning factory in South Africa, owned by RFG Holdings Ltd., is already running at full capacity, Agri SA said last month. A consortium of 160 producers began negotiations with the company to acquire the factory, but needed a further 200 million rand ($11.7 million) to 300 million rand to close the deal, the farm lobby group said.
Tiger Brands will explore all options while it assesses the viability of interest in the plant and will continue talks with the Western Cape and national government departments and with potential buyers who can meet the working capital requirements of the business, the company said.
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