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Tzaneen - Tomato farmers in the Greater Letaba Municipality in the Mopani district of Limpopo are set for a huge boost following the launch of a R100m tomato processing plant in Modjadjiskloof, Tzaneen by Dursots-All Joy.
The factory is expected to assist in addressing the increased demand of tomato paste in South Africa while at the same time ensuring business for 15 commercial farmers in the area.
"The factory seeks to source 15 000 tons of tomatoes from at least 15 commercial farmers. It has the potential to receive 30 000 tons of tomatoes resulting in 9 000 employment opportunities," said Minister of Trade and Industry (DTI) Rob Davies.
The factory, located in the small town of Modjadjiskloof, currently employs 70 people but once operations commence, the number will increase to 150. The plan is to ultimately employ 300 people.
Davies welcomed the creation of jobs in the area given the fact that there is a 70% unemployment rate in the municipality. Mayor Godfrey Modjadji said the factory would assist to put food on many people's table.
"As a municipality we want to guarantee you that we will give this plant 100% support because we know the jobs it will create will change the lives of our people for the better. The municipality was standing at 70% unemployment so we believe after the opening of the factory it will no longer be that," said Modjadji.
Workers at a tomato plant in Limpopo. (Karabo Ngoepe, News24)
More growth in the future
While government officials welcome and celebrate the investment, it's the local farmers who are brimming with joy as they now have a steady cash injection and distribution channel for their product.
According to the Tomato Producers Organisation, tomatoes are produced all over South Africa but the Limpopo province with its warm climate is best suited for production of tomatoes. Farmers in Limpopo produce around 3 600 hectares of tomatoes annually, around half the total production in South Africa.
Edward Motibane, a farmer and chairperson of the National African Farmers Union applauded the investment, saying that this would mean more growth for farmers in the area in the future.
Farmer Rachel Maphoto said the factory had created a huge market for the farmers.
"We used to plant but couldn't sell all of them, meaning we were losing. Now we know that once you have signed a contract with All Joy they are going to buy everything. I have now been able to increase my work force and plantation. I have now planted 6 hectors instead of the 1 hector I had," she said.
Journalists were given a stage-by-stage tour of the facility to see how the tomatoes brought in from the farms are processed into tomato paste.
This is what remains of the tomatoes after they have extracted the contents to make tomato paste. (Karabo Ngoepe, News24)
Agro-processing a vital sector
Davies also stressed the importance of the agro-processing sector in the South African economy, particularly in job creation.
He said two weeks ago his department launched the 8th iteration of the high impact Industrial Policy Action Plan (IPAP). According to the minister, this year's iteration of IPAP acknowledges agro-processing as one of the vital sectors in realising value-added growth and as part of the on-going efforts to support labour-intensive sectors of the economy.
Minister Davies quoted the 2015 McKinsey report, saying that in 2014 South Africa's agro-processing industry contributed R78bn to South Africa's GDP and employed 362 000 people.
According to the DTI, South Africa is currently a net importer of tomato paste. In 2012, the tariff applicable to tomato paste imports was increased to the WTO-bound rates of 37%.
There is currently a rebate facility administered by the International Trade Administration Commission which allows downstream manufacturers of tomato-based products to import bulk tomato paste free of duty should the domestic processors be unable to meet the requirements.
Tiger Brands and Dursots, who produce for their own needs, are currently South Africa's only tomato paste producers.
