Cape Town – Steers owner Famous Brands wants to get people working on South Africa’s farms again.
“I am really excited and enthused about the agricultural space (and) putting people back on the land,” Kevin Hedderwick, former Famous Brands CEO and now group strategic advisor responsible for merger and acquisitions, told Fin24 in an interview this week.
He said South Africans complain that there are no jobs, but “merrily” import goods from overseas that could be manufactured or harvested in South Africa.
Famous Brands on Monday announced the acquisition of a bankrupt state-of-the-art tomato paste manufacturing plant in the Coega precinct in the Eastern Cape at a significantly discounted purchase price.
The catch is that up to 35 000 tonnes of tomato paste are imported by South Africa annually to meet a shortfall, so the tomato paste won’t only supply Famous Brands hot spots like Wimpy, Mugg & Bean, Europa, Steers, Debonairs Pizza, Fishaways and Milky Lane. Hedderwick also wants to capitalise on this shortage in the rest of the South African market.
It follows a similar acquisition in May of chips factory Lamberts Bay Foods and forms part of the company’s strategy to own its supply chain. Both acquisitions are good news for farmers, especially black farmers who Famous Brands is trying to boost.
There is “an opportunity to engage with local black farmers in the Eastern Cape to grow and deliver tomatoes to this plant”, said Hedderwick. “They will have a guaranteed source of income for the crops that they take off the land every year.”
PODCAST: Interview with Kevin Hedderwick
Following past experience
Famous Brands will model the business on its empowerment venture, Famous Brands Fine Cheese Company (FBFCC), formerly Coega Cheese Company.
“We’ve done some nice work with regard to the dairy farmers in the Eastern Cape, who now produce cheese for us,” said Hedderwick.
“We’re working with the potato farmers in terms of providing products for us for the Lamberts Bay Foods. Now, we’re going to hopefully be putting some farmers back on the land … to grow tomatoes for us.”
The new company will comprise a strategic alliance partnership between local farmers, who will grow tomatoes on contract, and Famous Brands, which will be responsible for providing the customer base, as well as managing the production and route-to-market functions, it said.
The partnership will provide 35 jobs in the plant and deliver financial benefit for the farmers, the company said.
Hedderwick said his background at SABMiller informed his strategy to create a fully integrated food services company.
“So a lot of this stuff goes through my mind in terms of unpacking this particular business as a shade of SABMiller,” he said. “They go back to hops, barley (and) packaging – so a lot of it is not rocket science; a lot of it just makes good business sense.”