The Department of Trade, Industry and Competition (the dtic) is calling on Tiger Brands to halt the discussions on retrenchment following its announcement that it intended to close its Langeberg & Ashton Foods (L&AF) division.
Dtic Minister Ebrahim Patel has said in an interview with Business Report that, following the advice by Tiger Brands of its intention to close or dispose of its L&AF division, the department has engaged with the company to consider alternatives in view of the high number of jobs that will be affected.
Patel says he has assembled an experienced team of officials who have identified potential options over the past two weeks. These include the identification of possible buyers of the operation.
“We call on Tiger Brands to allow the process the opportunity to be completed. Tiger Brands has been the owner of these assets for many years and should work co-operatively with the government to find the best possible solution for the Ashton community and workers,” Patel said.
“From the government's perspective, the closure of the operations will be devastating to the town and community, affecting farmers, workers and businesses in the area that are reliant on the economic spin-offs from the Langeberg and Ashton Foods operations. Every effort should be made to avoid closure of the plant,” Patel said.
On Wednesday, Agri SA made a clarion call for the government to step in after Tiger Brands gave notice of its intention to close down its canning factory in Ashton, Western Cape, after it failed to find a buyer.
The agricultural organisation says this will hit more than 4 500 workers and cause socio-economic devastation to the surrounding community.
The canning factory has been in operation for more than 70 years and supplies fruit for Tiger Brands’ KOO brand, as well as international brands like Silverleaf and GoldReef.
The citrus industry is a major economic contributor, employing 120 000 people and generating R30 billion in export revenue. The further growth of the sector will translate into more jobs and revenue for South Africa.
The country’s largest food producer Tiger Brands confirmed on Wednesday that it had embarked on the labour consultation process on the future of its deciduous fruit business after a two-year search for a buyer had failed. Tiger Brands has indicated that 250 permanent jobs and 4 300 seasonal jobs are at stake at the peak of the season.
L&AF produces canned fruit and fruit purees largely for export markets, including Europe, China, Australia and Japan.
Tiger Brands says the deciduous fruit business operates in an industry where trade barriers have impacted the competitiveness of local produce. It says fluctuations in exchange rates and global crop yields add further volatility.
Agri SA says the factory’s main sources are cling peaches, bulida apricots and bon chrétien pears from 2 250 ha of canning fruit orchards.
“These orchards have been planted specifically for canning in the Klein-Karoo, Ashton, Robertson, Bonnievale, Breërivier, Wolseley and Ceres areas. Were the factory to close, about 300 farmers would have no alternative market for these fruits as the other fruit canning factory in South Africa, owned by the Rhodes Food Group, was already running at full capacity. These farmers would have to destroy the orchards,” it said.
Western Cape Minister of Finance and Economic Opportunities Mireille Wenger told the Business Report on Wednesday that they were concerned by Tiger Brands’ plan to close the factory as the factory played a significant role in the region’s job creation, as well as in the entire supply-chain in the agri-processing sector.