Dursot buys plant to paste over gap
EASTERN Trading Company had acquired a tomato-processing factory in Tzaneen in Limpopo, the food producer said yesterday.
The company trades as Dursot Food Corporation and is JSE-listed AH-Vest’s controlling shareholder.
The AltX-listed company, which produces All Joy and Dursot products, said South Africa had experienced a major shortage of tomato paste over an extended period of time and as a result had to rely on imported products. The group acquired the factory from Tiger Brands and was now in a process of buying new state-of-the-art equipment through Ross Catelli to increase its capacity.
Limpopo produces more than 60 percent of tomatoes produced locally.
“Dursot, together with All Joy, are committed to procuring all ingredients in South Africa,” the group said.
Its key objective is to increase its raw material from 80 percent to 95 percent to further reduce the exposure to imports. Collectively the two brands, All Joy and Dursots, produce more than 50 000 units of value-added products a year. This is done out of five of its factories located in Eikenhof, Johannesburg.
“This acquisition will guarantee the supply of quality tomato paste for both All Joy and Dursots and will benefit loyal customers that have supported the group for more than 25 years,” AH-Vest said.
In its year-end result in June, the group’s gross margin percentage dropped to 30.6 percent from 38.4 percent.
AH-Vest said its margins were negatively impacted by increased raw material costs caused by the deterioration in the rand, combined with an increase in a major raw material input being that of the cost of tomato paste through duties imposed by the government on imports of tomato paste, as well as general price increase due to the worldwide shortages of the commodity.
AH-Vest shares were untraded yesterday from the previous close of 29c.