Global player's shock move hits dried fruit exporter

Heinz backtracks on investment plan, writes Ray Smuts SHOCK WAVES are reverberating through the dried fruit-producing communities of the Northern and Western Cape following the decision by international food giant Heinz not to exercise an option to take over the dried fruit and food group SAD for R380 million. The reason for Heinz's decision has not been made public thus far but written confirmation was imminent at time of writing. It is known however that Heinz has sold some of its South African assets recently and there is also talk of closing its factory in Zimbabwe (The group's managing director Brian KŸsel was not available for comment at the time of writing). Leaders in agriculture say the shock move, which has effectively scuttled one of the largest investments yet in the South African agricultural sector, could mean hardship, even bankruptcy, for many of the almost 2 000 SAD producer/shareholders - most of them in the Lower Orange River Valley - who were eagerly anticipating cash injections from the sale of their shares. More than 820 000 have been issued, currently valued at R463 each. Said one close to the industry: "If Heinz is not doing this deal there is no reason for them to stay in South Africa." Sharing the disquiet of producers is Johannes Mšller, new president of the Northern Cape Agricultural Union, who says Heinz's decision will have "catastrophic consequences" for the agricultural sector in the Northern and Western Cape, adding that international investor confidence will have suffered a set-back. Mšller says investment in the fruit industry will also be negative, leading to few expansions of the industry and that labour will also be adversely affected. SAD chief executive Charl van Schoor, himself a shareholder, told FTW: "This has come as a disappointment to me personally. It was an ideal time for us to look into this deal and if successful I would have been able to retire. Now I have to work. "The whole exercise was to put cash in the hands of the farmers, now unfortunately they won't get it, but we are carrying on as before." Employing 1 800 people at 14 factories countrywide, SAD with headquarters at Wellington, is extremely diverse in its operation, producing not only dried fruit but fresh salads, vinegar, nuts and other products. An exporter since 1908, around half its annual production of some 70 000 tons of dried fruit goes abroad and turnover is expected to increase from R728 million last year to R800 million this year.